UniVision Engineering Limited
Annual Report
Year ended 31 March 2015
UNIVISION ENGINEERING LIMITED
Annual Report
Year ended 31 March 2015
Contents
Page
Board of Directors, Officers and Professional Advisers
Chairman’s Statement
Directors’ and Senior Management’s Biographies
Directors’ Report
Remuneration Report
Report on Corporate Governance
Statement of Directors’ Responsibilities
Independent Auditor’s Report to the Shareholders of UniVision
Engineering Limited
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of Cash Flows
Company Statement of Cash Flows
Notes to the Financial Statements
Notice of Annual General Meeting
2
3
7
9
14
15
18
19
21
22
23
24
25
26
27
28
75
BOARD OF DIRECTORS, OFFICERS
AND PROFESSIONAL ADVISERS
Board of Directors
Stephen Sin Mo KOO, Executive Chairman
Chun Pan WONG, Chief Executive Officer
Danny Kwok Fai YIP, Finance Director
Peter Yip Tak CHAN, Director of Sales and Marketing
Nicholas James LYTH, Non-Executive Director
Nominated Adviser and Broker
ZAI Corporate Finance Limited
Staple Court,
11 Staple Inn,
London WC1V 7QH,
UK.
Senior Management
Mike Chiu Wah CHAN, Director of Operations
Audit Committee
Nicholas James LYTH, Chairman
Stephen Sin Mo KOO
Remuneration Committee
Nicholas James LYTH, Chairman
Stephen Sin Mo KOO
AIM Stock Code
UVEL
Company Secretary
Danny Kwok Fai YIP
Registered Office
Unit 01A, 2/F., Sunbeam Centre,
27 Shing Yip Street,
Kwun Tong, Kowloon,
Hong Kong
Tel: (852) 2389 3256
Fax: (852) 2797 8053
E-mail: uvel@hk.uvel.com
Website: www.uvel.com
Principal bankers
Bank of China (Hong Kong)
Hong Kong and Shanghai Banking
Corporation Citibank, N.A.
Hua Nan Commercial Bank (Taiwan)
Auditor
HKCMCPA Company Limited
Certified Public Accountants
Unit 602, 6/F., Hoseinee House,
69 Wyndham Street,
Central, Hong Kong
Registrars
Computershare Investor Services
(Jersey) Limited
Queensway House,
Hilgrove Street,
St Helier,
Jersey JE1 1ES.
UK Depositary
Computershare Investor Services PLC
The Pavilions,
Bridgwater Road,
Bristol BS99 6ZZ,
UK
UNIVISION ENGINEERING LIMITED - 2 - ANNUAL REPORT 2015
CHAIRMAN’S STATEMENT
INTRODUCTION
I am pleased to report the Group’s audited results for the financial year ended 31 March 2015.
Notwithstanding that the revenue from the Group’s Security and Surveillance Systems business
recorded a 24.4% decrease compared with last financial year, the maintenance contract income
maintained growth of 9.7%. The Board has continued to focus on this segment, that generates much
higher gross profit and more stable cash flow to the Group. We anticipate that large infrastructure
projects and the line extension of the MTR in Hong Kong will provide the Company more
opportunities for business growth in the coming years.
Recognising the Board’s confidence in UniVision, it is declaring an increased final dividend of 0.39
HK cents (gross) per share for the financial year ended 31 March, 2015 (2014: 0.31 HK cents),
consistent with its dividend policy since the 2013 financial year.
The Directors remain confident of the future of UniVision and are optimistic about the Group’s
prospects.
DEMERGER OF LEADER SMART GROUP
The Group has completed the procedure to demerge its Electrical and Mechanical (“E&M”) and
property division (the “Demerger”) through an “in-specie” distribution of shares to UniVision’s
shareholders. The Board believes that the Demerger is in the best interests of the Company and
UniVision’s shareholders. After the demerger, it allows UniVision to focus on its core Security and
Surveillance business whilst the Leader Smart Group focuses on properties which are not related to
UniVision’s core security and surveillance systems business.The Leader Smart website
http://www.lshld.com/en/index.html# has been set up to update its shareholders about the company’s
activities..
The E&M business of Leader Smart has been effectively demerged from UniVision and is now an
independent operating entity under Leader Smart Holding Limited which is incorporated in the BVI
(British Virgin Islands). This move should improve the appeal of UniVision’s business to existing as
well as potential investors. The strategy also optimises the Group’s operational efficiency.
The value of the net assets of Leader Smart Group of £727K as 31 March, 2015 were distributed to
the UniVison Group’s shareholders in specie as a special dividend at 0.2 pence per ordinary share.
The demerger is treated as the distribution of non-cash assets to owners and the dividend in specie has
been debited to the retained earnings accordingly.
The effect of the demerger of the Leader Smart Group on UniVision has resulted in a debit of £4.74m
directly to equity.
FINANCIAL REVIEW
The profit from the continuing operation attributable to the equity holders of the Company is £91K
(2014: £2.9m). The main reason for the big variance was that the Group recognised a gain from
forgiveness of debt due to its former major shareholder of £2.5m in the 2014 financial year. Besides
this, the revenue from the construction contracts division recorded a decrease of 53% in the Taiwan
subsidiary. This led to the decrease in revenue of £1.9m in this business segment.
UNIVISION ENGINEERING LIMITED - 3 - ANNUAL REPORT 2015
CHAIRMAN’S STATEMENT
(Continued)
The Group generated positive net cash of £368K from its operating activities in the year (2014:
£548K). The decrease was mainly due to the deposit paid of £0.45m for the software fee for a major
project in Taiwan. The Hong Kong Company has a relatively strong cash position that generated
positive net cash of £883K from its operating activities in the year (2014: negative £12K) and
maintained a cash balance of £1m at the year end. This was contributed to by the effective control of
working capital. Net cash of £420K was generated from financing activities in the year (2014:
negative £673K) mainly from the proceeds from a bank loan to the Taiwan subsidiary for securing
new orders. The Group maintained cash and cash equivalents at 31 March 2015 of £1.2m (31 March
2014: £0.4m).
During the year under review, the relative strengthening closing rate at the year-end of the HK$
against Sterling has led to 11% appreciation in the GBP reporting amount in the Consolidated
Statement of Financial Position. All figures in the said Statement therefore needed to be adjusted for
comparison purposes.
Turnover in the year decreased by 24.2% to £6.7m (2014: £8.9m). This decrease was mainly due to
the significant drop in the construction contracts division in the Group’s Taiwan subsidiary that
recorded a decrease of revenue of 53% as compared with last year. Facing slow economic growth,
local customers cut down their capital expenditure and budgets. There was lower demand for
improving or replacing Security and Surveillance Systems.
The revenue from the construction contracts division (excluded the discontinued operations - E&M
business) recorded a decrease of 15.5% and 53% respectively in Hong Kong and Taiwan as compared
with last year. The drop of construction revenue in Hong Kong was mainly due to the delay of civil
works in the major project (the Hong Kong-Zhuhai-Macao Bridge Project) that slowed down the
progress of the construction works. There was also increased competition in job tendering for new
projects.
The Group’s maintenance contracts increased 9.7% overall compared with last year. The revenue and
profit margin of the Hong Kong maintenance business are relatively stable. Nevertheless, it recorded a
11.5% decrease in revenue mainly due to the change of scope in the service provided in the new
maintenance contract to MTR Corporation Limited for three years commencing on 1 January 2015.
The main maintenance contract and its sub-contracts provided regular cash flow for the Group’s
operations. The remarkable growth of 75.5% (£467K) in the Taiwan maintenance business partly
offsets the significant fall in revenue in its construction business. This growth was contributed to by
more orders from a local customer and also the release of maintenance budget by a major customer.
The Group’s Security and Surveillance Systems business is relatively stable and generates cash flows
for operations. The major customers in the Security and Surveillance Systems business are public
organisations and sizeable private enterprises, such as the various departments of the Hong Kong
Government and MTR Corporation Limited in Hong Kong and Formosa Group in Taiwan.
Gross profit margin slightly increased to 27.2% (2014: 25.9%). The major reason was the increase in
gross profit from 35% to 41% in the Group’s maintenance contracts, mainly due to effective control
of material costs, logistics and sub-contracting charges, and efficiency control to minimize the
replacement of equipment during the year. The gross margin in the Taiwan maintenance contracts was
much improved to 39% in the year. The decrease in Gross Profit from 22% to 18% in the Group’s
construction contracts was due to keen competition in tendering projects.
UNIVISION ENGINEERING LIMITED - 4 - ANNUAL REPORT 2015
CHAIRMAN’S STATEMENT
(Continued)
Administration expenses remain constant at £1.6m (2014: £1.6m) mainly due to effective cost control
to offset the effect of inflation. Finance costs were increased to £26K (2014: £21K) during the year
due to increase in borrowing from a bank by the Taiwan subsidiary.
The effect of the demerger of the Leader Smart Group with resulting in a debit of £4.74m to the
equity is related to the amount of the provision that was made by the Parent Company for the balance
due from the Leader Smart Group, which has been eliminated on consolidation in previous years. It
does not affect the profit and loss for the year.
‘Continuing operations’ represents the Group’s Security and Surveillance Systems business which is
undertaken by the Hong Kong Company and the Taiwan subsidiary. The E&M business undertaken
by the Leader Smart Group is classified as discontinued operations. The loss for the business during
the year was £31K (2014: £80K).
Profit before Interest and Tax (PBIT) from continuing operations was £156K (2014: £3m). Net profit
before income tax from continuing operations was £130K (2014: £3m). Basic profit from continuing
operations per share for this year was 0.02p (2014: 0.76p).
The Taiwan subsidiary declared a dividend of TWD2.8m (HK$0.73m) during the year. The dividend
was paid to the holding company in December 2014 after deducting the withholding tax.
No significant capital investment occurred in the year.
The directors propose the payment of a final dividend of 0.39 HK cents (gross) per share for the
financial year ended 31 March 2015 (2014: 0.31 HK cents). The dividend timetable is as follows:
Ex date
Record date
Payment date
17 September 2015
18 September 2015
12 October 2015
The dividend is subject to approval by shareholders at the Annual General Meeting and has not been
included as a liability in the financial statements.
BUSINESS REVIEW
Markets
According to Tech Navio's analysts forecast, the Global IP Video Surveillance market will grow at a
CAGR (Compound Annual Growth Rate) of 24.89 per cent over the period of four years from 2014 to
2018. The increase in concern over security and safety, and also the demand for high-quality images
to replace older surveillance systems, are two contributing factors to the growth of the CCTV market.
OnVIF and PSIA are expected to bring a standard in open markets in coming years. Apart from
megapixel resolution network security cameras, which are predicted to out-sell standard resolution
network security cameras, High Definition Serial Digital Interface (HD-SDI) cameras, which provide
high definition real time and no latency video via coaxial cable, are becoming another popular choice.
To overcome existing CCTV networks using coaxial cables, a strong tendency towards Ethernet Over
Coaxial devices will also play an important role in months to come.
UNIVISION ENGINEERING LIMITED - 5 - ANNUAL REPORT 2015
CHAIRMAN’S STATEMENT
(Continued)
The Group will explore M&A opportunities in related businesses, both locally and overseas, for
growth and expansion. Furthermore, the Group would like to expand its market geographically. The
target markets include United Arab Emirates and South East Asian countries.
Business
During the year, the Hong Kong Company was awarded a new construction contract for the Hong
Kong-Zhuhai-Macao Bridge Project with a contract value of HK$11.25m. It is another remarkable
project following the Kai Tak Cruise Terminal project. Further, the Company also obtained the
Central–Wanchai Bypass Tunnel Project. These strengthen the Group’s position in the Security and
Surveillance Systems business in Hong Kong.
Listing
This year 2015 is the 10th anniversary of UniVision’s listing on the London Stock Exchange’s AIM
market. It is a milestone that signifies the Group’s standing in the Security and Surveillance Systems
business sector. The Group has grown to be one of the leading providers of integrated security
systems in our markets.
PROSPECTS
UniVision will remain stable with a strong pipeline of infrastructure projects in the coming year.
.
The Board expects that the growing demand for its Network and High Definition Security and
Surveillance products will enable the Group to continue to prosper in these markets.
The Demerger allows the management of UniVision to have a more defined business focus on their
core Security and Surveillance Systems business and enhance their responsiveness to market changes.
The Board expects that the business will improve following the announcement of several major
proposed infrastructure projects in the coming years, including the High Speed Railway extension
(Hong Kong Section), the new runway for Hong Kong International Airport and the extension of
MTR lines in Hong Kong. The new line – Shatin-Central - is currently under construction. The
Directors believe the demand for Security and Surveillance Systems will remain high and that the
Group’s core competence relies on our dedicated and experienced management and personnel.
Finally, on behalf of the Board, I would like to thank our customers, suppliers and shareholders for
their continued support of UniVision. I would also like to acknowledge the hard work of the
management and all the staff for their contribution and dedication to the Group.
MR. STEPHEN SIN MO KOO
EXECUTIVE CHAIRMAN
10 September 2015
UNIVISION ENGINEERING LIMITED - 6 - ANNUAL REPORT 2015
DIRECTORS’ AND SENIOR
MANAGEMENT’S BIOGRAPHIES
DIRECTORS’ BIOGRAPHIES
Nicholas James LYTH – Non-executive Director (aged 49)
Mr. Lyth is a qualified chartered management accountant and has over 15 years experience as a
finance professional, having spent a number of years as director of UK companies. He has lived and
worked in China and can speak and write Mandarin. Nicholas is currently Non Executive Chairman
of Taihua plc, an AIM quoted manufacturer of pharmaceuticals, based in China. He is responsible for
day to day liaison with UK investors.
Stephen Sin Mo KOO – Executive Chairman (aged 58)
Mr. Koo joined UniVision in 1998 and was appointed as a Director on 3 March 2003. He is
responsible for overall strategic planning of our Group. He holds both a Bachelor Degree from the
University of Technology, Sydney, and a Masters Degree in Business from the Royal Melbourne
Institute of Technology in Australia. He is the Director of Up Sky Investments Limited, the Group’s
ultimate parent company. He is a Fellow of the Institute of Certified Public Accountants of Australia.
Chun Pan WONG – Chief Executive Officer (aged 55)
Mr. Wong joined UniVision in 1991 and was appointed as a Director on 25 March 1992. He holds a
Master Degree in Religious Studies in Chinese University of Hong Kong and a Bachelor Degree in
Computer Science from the University of Edinburgh, Scotland, and over 18 years experience in the
surveillance industry. Mr. Wong is responsible for formulating and overseeing the implementation of
UniVision’s business development strategies and for the management of the Company’s operations.
He is also responsible for the development of UniVision’s state of the art CCTV control and
monitoring systems and smart card access systems.
Danny Kwok Fai YIP –Finance Director (aged 51)
Mr. Yip was appointed as Finance Director on 18 September 2007. He was the Financial Controller
for the Group before the appointment. Mr. Yip obtained a Master of Corporate Finance degree from
The Hong Kong Polytechnic University and a Bachelor of Commerce (Accounting) degree from The
Curtin University of Technology, Australia. Before joining the Group, Mr. Yip was the Accounting
Manager of Nissin Food Group, the leading instant noodle manufacturing MNC. Mr. Yip has over 20
years experience in finance and accounting in different industries. He is a member of Hong Kong
Institute of Certified Public Accountants. He also acts as Company Secretary for the Corporation.
UNIVISION ENGINEERING LIMITED - 7 - ANNUAL REPORT 2015
DIRECTORS’ AND SENIOR
MANAGEMENT’S BIOGRAPHIES
(Continued)
Peter Yip Tak CHAN – Director of Sales and Marketing (aged 51)
Mr. Chan joined UniVision in 1995 and was appointed as a Director on 3 October 2014. He holds a
Degree in Computing from the University of Northwest Missouri and has over 10 years experience in
sales and project management. He is responsible for the management of UniVision’s Sales and
Marketing Division.
SENIOR MANAGEMENT’S BRIEF BIOGRAPHIES
Mike Chiu Wah CHAN – Director of Operations (aged 40)
Mr. Chan joined UniVision as Assistant Engineer in December 1996, and was promoted to a number
of increasingly senior positions in maintenance and project department, prior to being appointed to his
present position on 2 January 2008. He is now responsible for the management of UniVision’s Project
and Maintenance Division. Mr. Chan holds a Bachelor of Engineering degree in Industrial and
Manufacturing System Engineering from The University of Hong Kong.
UNIVISION ENGINEERING LIMITED - 8 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
DIRECTORS’ REPORT
The Directors have pleasure in presenting their annual report together with the audited financial
statements of the Group and the Company for the year ended 31 March 2015.
Principal Activities
The principal activities of the Company are the supply, design, consultation, installation and
maintenance of closed circuit television and surveillance systems, and the sale of security related
products.
Discontinued Operation
The Group discontinued its electrical and mechanical services (E & M business) at 31 March, 2015 by
demerging Leader Smart Group through a dividend in specie of shares under the group restructuring.
Review of the Business
A review of the Group and its future development is included in the Chairman’s Statement.
Assignment of Debt
The Company entered into the assignment of debt deed and agreed to transfer the balance with its
former subsidiaries to Leader Smart Holdings Limited, their new holding company after the demerger,
on 1 April, 2015.
Financial Position
The Group’s profit for the year ended 31 March 2015 and the state of affairs of the Group at that date
are set out in the consolidated statement of comprehensive income on page 19 and in the consolidated
balance sheet on page 20, respectively.
The Group’s and the Company’s changes in shareholders’ equity for the year ended 31 March 2015
are set out in the consolidated and the Company’s statement of changes in equity on page 22 and 23,
respectively.
The Group’s and the Company’s cash flow for the year ended 31 March 2015 is set out in the
consolidated and the Company’s statement of cash flows on pages 24 to 26.
UNIVISION ENGINEERING LIMITED - 9 - ANNUAL REPORT 2015
DIRECTORS’ REPORT
(Continued)
Key Performance Indicators (KPI)
Current Ratio:
Current Assets / Current Liabilities
Average Collection Period :
Trade receivables (net of allowance
for doubtful debts) / Sales per day
Inventory Turnover :
Cost of sales / Inventories
Gross profit Margin :
Gross profit / Sales
Debt to Equity Ratio :
Debt / Equity
Quick Ratio :
(Current Assets –Inventories)/ Current
Liabilities
Share Capital and Reserves
Details of the movements in share capital are set out in note 27 on page 63.
2015
2014
1.6
2.6
52 days
39 days
4.1
6.2
27%
26%
0.21
0.04
1.3
2.4
:
:
:
:
:
:
The movements in reserves during the year are set out in the consolidated statement of changes in
equity on page 22.
Dividends
The Directors propose that the payment of a final dividend of 0.39 HK cents (gross) per share for the
financial year ended 31 March 2015.
Plant and Equipment
Details of the movements in plant and equipment are set out in note 16 on pages 54 to 55.
Directors
The directors who held office during the year and to the date of this report were as follows:
Stephen Sin Mo KOO
Nicholas James LYTH
Chun Pan WONG
Danny Kwok Fai YIP
Peter Yip Tak CHAN (appointed on 3 October, 2014)
Mr. Stephen Sin Mo KOO, Mr. Nicholas James LYTH and Mr. Danny Kwok Fai YIP retire by
rotation at the forthcoming annual general meeting in accordance with the Company’s Articles of
Association and, being eligible, the current directors offer themselves for re-election.
UNIVISION ENGINEERING LIMITED - 10 - ANNUAL REPORT 2015
DIRECTORS’ REPORT
(Continued)
Directors’ Interests in Contracts
No director had a material interest in any contract of significance to the business of the Company to
which the Company, its holding company, or its subsidiaries was a party at the end of the year or at
any time during the year.
Directors’ Interests in Shares
According to the register of Directors’ Shareholdings kept by the Company, particulars of interests of
the Directors (or their immediate families) who held office at the end of the financial year in the
ordinary shares of the Company are as set out in the table below:
Ordinary Shares held as at 31 March 2015
Stephen Sin Mo KOO
Nicholas James LYTH
Chun Pan WONG
Danny Kwok Fai YIP
Peter Yip Tak CHAN
279,703,700*
-
-
-
-
* 78,744,000 ordinary shares are registered under the name of Up Sky Investments Limited which is
an investment holding company incorporated under the laws of the British Virgin Islands and is
wholly-owned by Mr. Stephen Sin Mo KOO. Mr. Stephen Sin Mo KOO, is deemed to be interested
in all the ordinary shares registered in the name of Up Sky Investments Limited.
Following the Share Transaction on 8 July 2011, the entire stake of UniVision Holdings Limited (it
holds 183,736,000 shares of the Company) was transferred to Up Sky Investments Limited, a
company that is wholly owned by Mr. Stephen Koo. He is also interested in 17,223,700 ordinary
shares in the Company. Therefore following the Share Transaction, he has a total direct and indirect
interest in 279,703,700 ordinary shares in the Company, equivalent to 72.9% of the Company’s total
issued share capital.
Save as disclosed in this report, none of the Directors (or their immediate families) who held office at
the end of the financial year had interests in the share capital of the Company during the financial year.
Directors’ Rights to Acquire Shares or Debentures
At no time during the year were rights to acquire benefits by means of the acquisition of shares in or
debentures of the Company granted to any director or their respective spouse or minor children, or
were any such rights exercised by them; or was the Company, its holding company, or its subsidiaries
a party to any arrangement to enable the directors of the Company to acquire by means of the
acquisition of shares in, or debentures of any other body corporate.
UNIVISION ENGINEERING LIMITED - 11 - ANNUAL REPORT 2015
DIRECTORS’ REPORT
(Continued)
Substantial Shareholdings
As at 7 September 2015, the Directors had been informed of the following companies that held 3% or
more of the Company’s issued ordinary share capital:
UniVision Holdings Limited (1)
Up Sky Investments Limited (2)
Hargreaves Lansdown (Nominees)
Limited
Beaufort Nominees Limited
Number of ordinary
shares
183,736,000
78,744,000
31,260,820
24,467,998
% of total issued share capital
47.9
20.5
8.1
6.4
(1) UniVision Holdings Limited is an investment holding company incorporated under the laws of the
British Virgin Islands and was formerly owned by Mayne Management Limited. Up Sky Investments
Limited acquired the entire stake from Mayne Management Limited on 8 July 2011 and became the
major shareholder.
(2) Up Sky Investments Limited is an investment holding company incorporated under the laws of the
British Virgin Islands and is wholly-owned by Mr. Stephen Sin Mo KOO.
Payments to Creditors
The Group does not follow any code or standard on payment practice but instead the Group policy is
to pay all creditors in accordance with agreed terms of business.
Political and Charitable Donations
During the year the Company made £80 charitable contributions (2014: Nil). No political contribution
was made.
Employees
The Group values staff involvement at all levels of operations, and uses various means to train, inform
and consult the employees. The Group encourages the management to discuss regularly with the
employees on both corporate and individual matters and discloses information to them that will
increase their awareness of the financial and economic factors affecting the Group.
The Group recognises its obligations to provide a fair consideration on all vacancies towards people
with disability and to ensure that such persons are not discriminated against on the grounds of their
disability. For those employees who become disabled during their employment period, the Group will
make every effort to ensure that their employment will continue and that sufficient training is
arranged.
UNIVISION ENGINEERING LIMITED - 12 - ANNUAL REPORT 2015
DIRECTORS’ REPORT
(Continued)
Annual General Meeting
The Annual General Meeting of the Company will be held at UniVision Engineering Limited, Unit
01A, 2/F Sunbeam Centre, 27 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong, on 8 October
2015 at 5:00 p.m. The Notice of Meeting appears on page 75.
Annual Report
The annual report for the year ended 31 March 2015 will be uploaded on the Company’s website
www.uvel.com on 10 September, 2015 and the hard copy will be sent to shareholders by our
Registrars, Computershare Investor Services (Jersey) Limited.
Auditor
HKCMCPA Company Limited, Certified Public Accountants remain as our auditor for the year. A
resolution to re-appoint HKCMCPA Company Limited, Certified Public Accountants as auditor of the
Company will be put to the forthcoming Annual General Meeting.
By Order of the Board
Mr. Stephen Sin Mo KOO
Executive Chairman
Hong Kong
10 September 2015
UNIVISION ENGINEERING LIMITED - 13 - ANNUAL REPORT 2015
REMUNERATION REPORT
The Remuneration Committee presents this report to shareholders on behalf of the Board.
Membership of Remuneration Committee
The Remuneration Committee comprises Mr. Nicholas James LYTH (our Non-executive Director)
and Mr. Stephen Sin Mo KOO (our Executive Chairman) and is chaired by Mr. Nicholas James
LYTH.
Policy Statement
The Remuneration Committee sets the remuneration and all other terms of employment of the
Executive Directors with a vision to provide a package which is suitable for the responsibilities
involved. The remuneration of the Executive Directors is determined by the Remuneration
Committee having regard to the performance and experience of individuals, the overall performance
of the Group and market trends.
Directors’ Remuneration
Details of individual director’s remuneration for the year are set out in the table below:
Salary and
fees
£
Pension
scheme
contribution
£
23,996
50,474
-
40,379
20,512
120
1,400
-
1,400
720
Bonus
£
-
4,159
-
3,327
3,343
2015
Total
£
24,116
56,033
-
45,106
24,575
-
2014
Total
£
-
50,318
62,685
43,584
-
49,542
11,518
-
-
11,518
11,747
Executive Directors
Stephen Sin Mo KOO
Chun Pan WONG
Chun Hung WONG
Danny Kwok Fai YIP
Peter Yip Tak CHAN
Chun Hung WONG
Non-executive Director
Nicholas James LYTH
Directors’ Interests in Contracts and Interests in Shares
Details of Directors’ Interests in Contracts and Interests in Shares are given in the Directors’ Report.
UNIVISION ENGINEERING LIMITED - 14 - ANNUAL REPORT 2015
REPORT ON CORPORATE GOVERNANCE
Introduction
The Directors believe that their foremost function is to generate continuous profits for the Company’s
investors, and that this should be achieved by a policy of high standards of corporate governance,
integrity and ethics. As the Company is listed on AIM and not subject to the Listing Rules of the UK
Listing Authority, it is not officially required to comply with the provisions detailed in the Combined
Code on Corporate Governance. However, it is the intention of the Board to manage the Company’s
and Group’s affairs in accordance with this Code, in so far as is practical and appropriate for a public
company of this size and complexity. The following are a few examples on how the Directors have
applied the principles of good corporate governance to manage the Company throughout the year.
Board of Directors
The Board directs and controls the Company and is responsible for strategy and operating
performance. It meets regularly throughout the year and has adopted a schedule of matters
specifically reserved for its decision.
All Directors are elected by shareholders at the first opportunity after their initial appointment to the
Board and to be re-elected thereafter at intervals of not more than three years. Biographical
information on all the Directors is listed in the Directors’ and Senior Management’s Biographies
section to the annual report, which may help the shareholders to make a decision at the time of re-
election.
Upon their appointments, the Directors are offered an opportunity to request information and training
relevant to their legal and other duties. They are also given written guidelines and rules defining their
responsibilities within an AIM listed company.
The Board considers that all Non-executive Directors are independent of management and day to day
operation, and free from any commercial relationship with the Company. These Non-executive
Directors do not participate in any of the Company’s pension schemes or bonuses. The Chairman of
the Audit and Remuneration Committees is a Non-executive Director.
Nomination Committee
As the Board of Directors of the Company is relatively small, there is no separate Nomination
Committee. All nominations to the Board are considered by all of the Directors.
Audit Committee
Our Audit Committee comprises Mr. Nicholas James LYTH (our Non-executive Director) and Mr.
Stephen Sin Mo KOO (our Executive Chairman) and is chaired by Mr. Nicholas James LYTH. The
Chairman of the Audit Committee has full discretion to invite any Executive Directors to attend its
meetings. The Audit Committee meets not less than twice per annum.
UNIVISION ENGINEERING LIMITED - 15 - ANNUAL REPORT 2015
REPORT ON CORPORATE GOVERNANCE
(Continued)
The responsibilities of the Committee are to:
- monitor the quality of the overall internal control system of all financial matters;
-
-
-
-
-
-
review the Company’s Accounting Policies and ensure compliance with accounting standards;
ensure that the financial performance of the Company is properly measured and reported on;
consider the appointment/re-appointment of the external auditor;
review the conduct of the audit and discuss the audit fees;
review reports from the Auditors relating to the Company’s accounting and internal controls;
to ensure the Company complies with the AIM Rules.
Remuneration Committee
Our Remuneration Committee comprises Mr. Nicholas James LYTH (our Non-executive Director)
and Mr. Stephen Sin Mo KOO (our Executive Chairman) and is chaired by Mr. Nicholas James
LYTH. The Remuneration Committee meets as required.
The responsibilities of the Committee are to:
-
determine the specific remuneration package for each Director including Director’s fees, salaries,
allowances, bonuses, options, benefits-in-kind; and
seek professional advice, including comparison with similar businesses, in order to correctly fulfil
its duties, as the Committee deems appropriate.
-
In discharging its functions, the Committee may obtain independent external legal and other
professional advices as it deems necessary. The expense of such advice shall be borne by the
Company.
Internal Control
The Board of Directors is responsible for ensuring that the Company maintains an internal financial
control system with appropriate monitoring procedures for all Group companies. The purpose of this
system is to safeguard Company assets, maintain proper accounting records, and ensure that reliable
financial information is used within the Group and for publication purposes. However, the system is
designed to manage rather than completely eliminate risk and can only provide reasonable but not
absolute assurance against material misstatement.
In order to achieve the above responsibilities, the Board meets regularly and monitors the Company’s
internal financial control by reviewing the overall process and the performance of the systems, setting
annual budgets and periodic forecasts, and seeking any prior approval for all significant expenditure.
The Group currently does not have an internal audit department and after extensive review and
consideration, the Board has concluded that the existing control mechanisms are sufficient for the size
of the Group. This decision will be kept under review.
UNIVISION ENGINEERING LIMITED - 16 - ANNUAL REPORT 2015
REPORT ON CORPORATE GOVERNANCE
(Continued)
Going Concern
After making appropriate enquiries, the Directors have a reasonable expectation that the Company and
the Group have adequate resources to continue in operational existence for the foreseeable future. For
this reason, they continue to adopt the going concern basis in preparing the Company’s and Group’s
financial statements.
Investor Relations
The Company realises that effective communication can increase transparency and accountability to
its shareholders; as such, the Company discloses its information to its shareholders through RNS (i.e.
the news distribution service operated by the London Stock Exchange plc). The same information can
also be found on the Company’s website (www.uvel.com). The Company will make every effort to
ensure that all price-sensitive information is released publicly and immediately. If an immediate
announcement is not possible, the Company will try to publicize the information at the earliest time
possible to ensure that the shareholders and the public have fair access to it.
The Company will send the Annual Report and the notice of the Annual General Meeting (AGM) to
all its shareholders. This notice is also made available on RNS. The Company recognises the
importance of the shareholders’ views and encourages them to attend the AGMs where they can share
their opinions and raise direct queries and concerns towards the Directors, including the chairperson
of each of the Board Committees. The shareholders are also welcomed to discuss any issues on an
informal basis at the conclusion of the AGMs.
UNIVISION ENGINEERING LIMITED - 17 - ANNUAL REPORT 2015
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Directors’ Report and the financial statements in
accordance with applicable law and regulations.
The Directors are responsible for preparing financial statements for each financial year which give a
true and fair view of the state of affairs of the Group and the Company and of the profit or loss for
that year.
In preparing those financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether applicable accounting standards have been followed, subject to any material
departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume
that the Group and the Company will continue in business.
The Directors are responsible for keeping proper accounting records that disclose with reasonable
accuracy at any time the financial position of the Company. They have general responsibility for
taking such steps as are reasonably available to them to safeguard the assets of the Group and the
Company to prevent and detect fraud and other irregularities.
UNIVISION ENGINEERING LIMITED - 18 - ANNUAL REPORT 2015
INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF
UNIVISION ENGINEERING LIMITED
(Incorporated in Hong Kong with limited liability)
We have audited the financial statements of UniVision Engineering Limited (the “Company”) and its
subsidiaries (collectively referred to as the “Group”) set out on pages 21 to 74, which comprise the
Consolidated and the Company’s Statement of Financial Position as at 31 March 2015, and the
Consolidated Statement of Comprehensive Income, the Consolidated and the Company’s Statement of
Changes in Equity and the Consolidated and the Company’s Statement of Cash Flows for the year
then ended, and a summary of significant accounting policies and other explanatory notes.
This report is made solely to the Company’s shareholders, as a body, in compliance with the
Alternative Investment Market Rules (“AIM Rules”) for companies as published by the London Stock
Exchange plc. Our audit work has been undertaken so that we might state to the Company’s
shareholders those matters we are required to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the Company and the Company’s shareholders as a body for this report or for the opinions
we have formed.
Directors’ responsibility for the financial statements
The Directors are responsible for the preparation of these financial statements in accordance with
International Financial Reporting Standards and for being satisfied that they give a true and fair view
and for such internal control as the Directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with International Standards on Auditing. Those standards require
that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material misstatement.
Scope of the audit of the financial statements
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation of financial statements that give a true and fair view in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the Directors, as
well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
UNIVISION ENGINEERING LIMITED - 19 - ANNUAL REPORT 2015
INDEPENDENT AUDITOR’S REPORT (CONTINUED)
TO THE SHAREHOLDERS OF
UNIVISION ENGINEERING LIMITED
(Incorporated in Hong Kong with limited liability)
Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of
the Company and the Group as at 31 March 2015 and their financial performance and cash flows for
the year then ended, in accordance with International Financial Reporting Standards.
HKCMCPA Company Limited
Certified Public Accountants
PANG KING SZE, RUFINA
Practising Certificate number P05228
Hong Kong, China
10 September 2015
UNIVISION ENGINEERING LIMITED - 20 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2015
Continuing operations
Revenue
Cost of sales
Gross profit
Other income
Other gains and losses
Selling and distribution expenses
Administrative expenses
Finance costs
Profit before income tax
Notes
2015
£
2014
£
7(a)
6,713,991
8,854,802
10
(4,885,202)
(6,562,989)
1,828,789
2,291,813
8
9
10
10
12
2,926
3,084
(103,185)
(1,575,024)
(26,401)
10,518
2,494,562
(137,963)
(1,640,200)
(20,787)
130,189
2,997,943
Income tax credit/(expense)
13
13,023
(13,499)
Profit for the year from continuing operations
143,212
2,984,444
Discontinued operations
Loss for the year from discontinued operations
Profit for the year
Other comprehensive income/(loss), net of tax
Item that may be reclassified subsequently to profit or loss:
Exchange differences on translation foreign operations
(30,657)
(79,714)
112,555
2,904,730
51,339
(985,245)
Total comprehensive income for the year
163,894
1,919,485
Profit attributable to :
Equity shareholders of the Company
Profit from continuing operations
Loss from discontinued operations
Equity shareholders of the Company
Non-controlling interests
Total comprehensive income attributable to:
Equity shareholders of the Company
Non-controlling interests
90,594
(30,657)
59,937
52,618
2,900,301
(79,714)
2,820,587
84,143
112,555
2,904,730
78,311
85,583
1,870,597
48,888
163,894
1,919,485
Earnings per share – Basic and Diluted
Continuing and discontinued operations
Continuing operations
14
14
0.02p
0.02p
0.74p
0.76p
UNIVISION ENGINEERING LIMITED - 21 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2015
ASSETS
Non-current assets
Plant and equipment
Goodwill
Trade and other receivables
Total non-current assets
Current assets
Inventories
Trade and other receivables
Bank deposits
Cash and cash equivalents
Total current assets
Total assets
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables
Current tax liability
Loan and borrowings
Obligations under finance lease
Total current liabilities
Non-current liability
Obligations under finance lease
Total liabilities
Equity
Share capital
Reserves
Notes
2015
£
2014
£
16
17
21
19
21
22
22
47,629
25,830
2,973,435
43,886
25,830
1,324,331
3,046,894
1,394,047
1,205,464
4,323,003
251,641
1,221,707
1,059,065
14,299,649
223,865
379,860
7,001,815
15,962,439
10,048,709
17,356,486
23
24(a)
25
26
3,242,616
34,442
1,122,052
7,694
4,544,953
1,226,973
440,582
6,844
4,406,804
6,219,352
26
27
641
7,415
4,407,445
6,226,767
1,697,617
3,551,167
1,697,617
9,098,833
Equity attributable to equity shareholders of the Company
5,248,784
10,796,450
Non-controlling interests
Total equity
Total liabilities and equity
392,480
333,269
5,641,264
11,129,719
10,048,709
17,356,486
The financial statements on pages 21 to 74 were authorised for issue by the board of directors on 10
September 2015 and were signed on its behalf by:
Stephen Sin Mo KOO, Director
Chun Pan WONG, Director
UNIVISION ENGINEERING LIMITED - 22 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
COMPANY STATEMENT OF FINANCIAL POSITION
As at 31 March 2015
ASSETS
Non-current assets
Plant and equipment
Interests in subsidiaries
Trade and other receivables
Total non-current assets
Current assets
Inventories
Trade and other receivables
Bank deposits
Cash and cash equivalents
Total current assets
Total assets
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables
Obligations under finance lease
Notes
2015
£
2014
£
16
18
21
19
21
22
22
32,248
106,384
2,973,435
17,297
2,767,277
-
3,112,067
2,784,574
841,910
1,839,318
251,641
1,044,484
744,381
1,868,816
223,865
160,210
3,977,353
2,997,272
7,089,420
5,781,846
23
26
2,257,803
7,694
1,444,776
6,844
Total current liabilities
2,265,497
1,451,620
Non-current liability
Obligations under finance lease
Total liabilities
Equity
Share capital
Reserves
Total equity
Total liabilities and equity
26
641
7,415
2,266,138
1,459,035
27
1,697,617
3,125,665
1,697,617
2,625,194
4,823,282
4,322,811
7,089,420
5,781,846
The financial statements on pages 21 to 74 were authorised for issue by the board of directors on 10
September 2015 and were signed on its behalf by:
Stephen Sin Mo KOO, Director
Chun Pan WONG, Director
UNIVISION ENGINEERING LIMITED - 23 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2015
Share
capital
£
Share
premium
£
(Note 1)
Attributable to the equity shareholders of the Company
Statutory
surplus
reserves
£
Retained
earnings
£
Special
capital
reserve “A”
£
(Note 2)
Special
capital
reserve “B”
£
(Note 3)
Translation
reserve
£
Sub-total
£
Non-
controlling
interest
£
Total
equity
£
Balance at 1 April 2013
1,697,617
2,192,640
2,349,944
155,876
143,439
7,927
2,620,968
9,168,411
284,381
9,452,792
Comprehensive income:
Profit or loss
Other comprehensive income/(loss):
Exchange difference arising on
translation of foreign operations
Total other comprehensive loss for
the year, net of tax
Total comprehensive income
Dividend paid in respect of 2013 year
Total transactions with owners,
recognised directly in equity
-
-
2,820,587
-
-
-
-
-
-
-
-
2,820,587
-
2,820,587
-
(242,558)
-
(242,558)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,820,587
84,143
2,904,730
(949,990)
(949,990)
(35,255)
(985,245)
(949,990)
(949,990)
(35,255)
(985,245)
(949,990)
1,870,597
48,888
1,919,485
-
-
(242,558)
(242,558)
-
-
(242,558)
(242,558)
1,697,617
2,192,640
4,927,973
155,876
143,439
7,927
1,670,978
10,796,450
333,269
11,129,719
Balance at 31 March 2014
Comprehensive income:
Profit or loss
Other comprehensive income:
Exchange difference arising on
translation of foreign operations
Total other comprehensive income for
the year, net of tax
Total comprehensive income
Transfer to statutory surplus reserves
Effect on demerger
De-merger by dividend in specie
Dividend distributed by a subsidiary
Dividend paid in respect of 2014 year
Total transactions with owners,
recognised directly in equity
-
-
59,937
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
59,937
(6,926)
(4,014,851)
(791,425)
-
(103,561)
-
(4,916,763)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
59,937
52,618
112,555
18,374
18,374
32,965
51,339
18,374
18,374
32,965
51,339
18,374
78,311
85,583
163,894
6,926
6,850
-
-
-
-
(722,990)
-
-
-
-
(4,730,991)
(791,425)
-
-
-
-
(26,372)
(103,561)
-
-
(4,730,991)
(791,425)
(26,372)
(103,561)
13,776
(722,990)
(5,625,977)
(26,372)
(5,652,349)
Balance at 31 March 2015
1,697,617
2,192,640
71,147
155,876
143,439
21,703
966,362
5,248,784
392,480
5,641,264
The currency translation from Hong Kong Dollars (“HK$”) to the presentation currency of Sterling
Pound (“£”) used in the financial statements has no impact on the available distributable reserves of
the Company at 31 March 2015.
Notes:
1.
Share premium
The Company may by resolution reduce the share premium account in any manner authorised and subject
to any conditions prescribed by law.
2.
Special capital reserve “A”
Pursuant to the Order of the High Court dated 20 November 2004, any future recoveries of the
Company’s accumulated provision for obsolete inventories and provision for bad debts amounting to
HK$1,935,002 and HK$3,592,540 respectively will be credited to non-distributable special capital
reserve “A” account.
3.
Special capital reserve “B”
By a special resolution passed on 30 July 2004 and Order of the High Court dated 20 November 2004,
the authorised and issued capital of the Company was reduced from HK$159,245,000 divided into
31,849 ordinary shares of HK$5,000 each to HK$16,405,000 divided into 3,281 ordinary shares of
HK$5,000 each. The reduction of capital was effected by cancellation of 28,568 ordinary shares of
HK$5,000 each in the issued and paid up share capital of the Company. The Company established a non-
distributable special capital reserve “B” account into which HK$2,071,307 was credited as a result of the
capital reduction.
UNIVISION ENGINEERING LIMITED - 24 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2015
Attributable to equity shareholders of the Company
Share
capital
£
Share
premium
£
(Note 1)
Accumulated
losses
£
Special
capital
reserve “A”
£
(Note 2)
Special
capital
reserve “B”
£
(Note 3)
Translation
reserve
£
Total
equity
£
Balance at 1 April 2013
1,697,617
2,192,640
(2,741,866)
155,876
143,439
608,479
2,056,185
Comprehensive income:
Profit or loss
Other comprehensive loss:
Exchange difference arising on translation
of foreign operations
Total other comprehensive loss for the
year, net of tax
Total comprehensive income
Dividend paid in respect of 2013 year
Total transactions with owners,
recognised directly in equity
-
-
-
-
-
-
-
-
-
-
-
-
2,807,923
-
-
2,807,923
(242,558)
(242,558)
-
-
-
-
-
-
-
-
-
-
-
-
-
2,807,923
(298,739)
(298,739)
(298,739)
(298,739)
(298,739)
2,509,184
-
-
(242,558)
(242,558)
Balance at 31 March 2014
1,697,617
2,192,640
(176,501)
155,876
143,439
309,740
4,322,811
Comprehensive income:
Profit or loss
Other comprehensive income:
Exchange difference arising on translation
of foreign operations
Total other comprehensive income for the
year, net of tax
Total comprehensive income
Demerger by dividend in specie
Dividend paid in respect of 2014 year
Total transactions with owners,
recognised directly in equity
-
-
-
-
-
-
-
-
-
-
-
-
-
-
789,219
-
-
789,219
(791,425)
(103,561)
(894,986)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
789,219
606,238
606,238
606,238
606,238
606,238
1,395,457
-
-
-
(791,425)
(103,561)
(894,986)
Balance at 31 March 2015
1,697,617
2,192,640
(282,268)
155,876
143,439
915,978
4,823,282
The currency translation from Hong Kong Dollars (“HK$”) to the presentation currency of Sterling
Pound (“£”) used in the financial statements has no impact on the available distributable reserves of
the Company at 31 March 2015.
Notes:
1.
Share premium
The Company may by resolution reduce the share premium account in any manner authorised and subject to
any conditions prescribed by law.
2.
Special capital reserve “A”
Pursuant to the Order of the High Court dated 20 November 2004, any future recoveries of the Company’s
accumulated provision for obsolete inventories and provision for bad debts amounting to HK$1,935,002 and
HK$3,592,540 respectively will be credited to non-distributable special capital reserve “A” account.
3.
Special capital reserve “B”
By a special resolution passed on 30 July 2004 and Order of the High Court dated 20 November 2004, the
authorised and issued capital of the Company was reduced from HK$159,245,000 divided into 31,849 ordinary
shares of HK$5,000 each to HK$16,405,000 divided into 3,281 ordinary shares of HK$5,000 each. The
reduction of capital was effected by cancellation of 28,568 ordinary shares of HK$5,000 each in the issued and
paid up share capital of the Company. The Company established a non-distributable special capital reserve “B”
account into which HK$2,071,307 was credited as a result of the capital reduction.
UNIVISION ENGINEERING LIMITED - 25 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 March 2015
Notes
2015
£
2014
£
Cash flows from operating activities
Profit before income tax
Adjustments for:
Interest expense
Interest income
Depreciation of plant and equipment
Impairment loss recognised on trade and other receivables
Allowance for obsolete inventories
Reversal of allowance for obsolete inventories
Write-off of inventories
(Gain)/loss on disposal of plant and equipment
Gain from forgiveness of debt
Changes in operating assets and liabilities:
Decrease/(increase) in inventories
Increase in trade and other receivables
Increase in trade and other payables
Cash generated from operations
Income tax paid
Net cash generated from operating activities
Cash flows from investing activities
Interest received
Purchase of plant and equipment
Proceeds from disposal of plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Interest paid
Dividend paid to shareholders of the Company
Dividend paid to non-controlling interests
Repayment of finance lease liabilities
Proceeds from loan and borrowings
Repayment of loan and borrowings
Net cash generated from/(used in) financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effect of foreign exchange rate changes
12
8
16
21
19
19
9
9
9
8
12
15
130,189
2,918,229
26,401
(1,223)
36,172
40,594
-
(25,427)
-
(155)
-
20,787
(1,293)
49,086
99,907
9,660
-
47,444
2,675
(2,496,353)
206,551
650,142
11,652
(676,696)
865,642
407,149
(39,120)
368,029
1,223
(35,554)
673
(33,658)
(26,401)
(95,137)
(27,342)
(7,068)
575,816
-
419,868
754,239
379,860
87,608
(84,614)
(125,309)
121,747
561,966
(13,360)
548,606
1,293
(16,002)
365
(14,344)
(20,787)
(242,558)
-
(7,162)
-
(402,126)
(672,633)
(138,371)
585,046
(66,815)
379,860
Cash and cash equivalents at end of year
22
1,221,707
UNIVISION ENGINEERING LIMITED - 26 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
COMPANY STATEMENT OF CASH FLOWS
For the year ended 31 March 2015
Cash flows from operating activities
Profit before income tax
Adjustments for:
Interest expense
Interest income
Depreciation of plant and equipment
Write-off of inventories
Loss on disposal of plant and equipment
Reversal of impairment loss
Gain from forgiveness of debt
Changes in operating assets and liabilities:
Increase in inventories
Decrease/(increase) in trade and other receivables
Decrease in amounts due from former subsidiaries
Increase in trade and other payables
Notes
2015
£
2014
£
16
9
9
789,219
2,807,923
1,149
(869)
14,605
-
38
(727,046)
-
1,164
(986)
16,494
47,444
2,675
-
(2,496,353)
77,096
378,361
(4,750)
199,516
28,302
582,765
(61,579)
(587,051)
50,213
208,025
Net cash generated from/ (used in) operating activities
882,929
(12,031)
Cash flows from investing activities
Interest received
Purchase of plant and equipment
Proceeds from disposal of plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Interest paid
Dividend paid to shareholders of the Company
Repayment of finance lease liabilities
869
(26,886)
480
(25,537)
(1,149)
(95,137)
(7,068)
986
(5,715)
365
(4,364)
(1,164)
(242,558)
(7,162)
Net cash used in financing activities
(103,354)
(250,884)
Net increase/(decrease) in cash and cash equivalents
754,038
(267,279)
Cash and cash equivalents at beginning of year
Effect of foreign exchange rate changes
160,210
130,236
456,758
(29,269)
Cash and cash equivalents at end of year
22
1,044,484
160,210
UNIVISION ENGINEERING LIMITED - 27 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
1. GENERAL
UniVision Engineering Limited (“the Company”) is incorporated in Hong Kong with limited liability
and its shares are listed on the Alternative Investment Market of the London Stock Exchange
(“AIM”). The address of the registered office is Unit 1A, 2/F., Sunbeam Centre, 27 Shing Yip
Street, Kwun Tong, Kowloon, Hong Kong.
The financial statements are presented in Sterling Pound (“£”), which is the presentation currency of
the Company.
The Company acts as an investment holding company. The Company and its subsidiaries (hereinafter
collectively referred to as the “Group”) are engaged in the supply, design, installation and
maintenance of closed circuit television and surveillance systems and the sale of security system
related products. The electronic and mechanical business was discontinued and demerged on 31
March 2015 and further details are presented in note 31 to the financial statements. The principal
activities of its subsidiaries are set out in note 18 to the financial statements.
2.
BASIS OF PREPARATION
The financial statements have been prepared in accordance with International Financial Reporting
Standards (“IFRSs”) as issued by the International Accounting Standards Board (“IASB”).
The financial statements have been prepared under the historical cost convention basis, as modified
by the revaluation of financial assets and liabilities at fair value through profit or loss.
The preparation of financial statements in conformity with IFRSs requires management to make
judgements, estimates and assumptions that affect the application of policies and reported amounts of
assets, liabilities, income and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements about carrying values of
assets and liabilities that are not readily apparent from other sources. Actual results may differ from
these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is revised if the revision
affects only that period, or in the period of the revision and future periods if the revision affects both
current and future periods.
Judgements made by management in the application of IFRSs that have significant effect on the
financial statements and major sources of estimation uncertainty are discussed in note 4 in the
financial statements.
UNIVISION ENGINEERING LIMITED - 28 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
3.
APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING
STANDARDS (“IFRSs”)
(a) New and revised IFRSs that have been issued and effective
The following standards have been adopted by the Group and the Company for the first time for the
year ended 31 March 2015:
- Amendments to IAS 32 “Offsetting Financial Assets and Financial Liabilities” clarify the
requirements relating to the offset of financial assets and liabilities. Specifically, the
amendments clarify the meaning of ‘currently has a legally enforceable right of set-off’ and
‘simultaneous realisation and settlement’. The amendments require retrospective application.
- Amendments to IAS 36 “Recoverable amount disclosures for non-financial assets” remove the
requirement to disclose the recoverable amount of a cash-generating unit (CGU) to which
goodwill or other intangible assets with indefinite useful lives had been allocated when there has
been no impairment or reversal of impairment of the related CGU. Furthermore, the
amendments introduce additional disclosure requirements applicable to when the recoverable
amount of an asset or a CGU is measured at fair value less costs of disposal. These new
disclosures include the fair value hierarchy, key assumptions and valuation techniques used
which are in line with the disclosure required by IFRS 13 “Fair Value Measurements”. The
amendments require retrospective application.
- Amendments to IAS 39 “Novation of derivatives and continuation of hedge accounting”
provide relief from the requirement to discontinue hedge accounting when a derivative
designated as a hedging instrument arising from the novation should be included in the
assessment and measurement of hedge effectiveness. The amendments require retrospective
application.
-
IFRIC 21 “Levies” addresses the issue of when to recognise a liability to pay a levy. The
interpretation defines a levy, and specifies that the obligation event that gives rise to the liability
is the activity that triggers the payment of the levy, as identified by legislation. The
interpretation provides guidance on how different levy arrangements should be accounted for, in
particular, it clarifies that neither economic compulsion nor the going concern basis of financial
statements preparation implies that an entity has a present obligation to pay a levy that will be
triggered by operating in a future period. IFRIC 21 requires retrospective application.
UNIVISION ENGINEERING LIMITED - 29 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
3.
APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING
STANDARDS (“IFRSs”) (CONTINUED)
(b) New and revised IFRSs that have been issued but are not yet effective
The following new and revised IFRSs, potentially relevant to the Group’s and the Company’s
operations, have been issued and are mandatory for adoption by the Group and the Company for
accounting periods beginning on or after 1 January 2015 or later periods. However, the Group and
the Company have not early adopted them.
IFRS 9 (2014) “Financial instruments”
IFRS 14 “Regulatory deferral accounts”
IFRS 15 “Revenue from contracts with customers”
•
•
•
• Amendments to IFRS 11 “Accounting for acquisitions of interests in joint operations”
• Amendments to IAS 16 and IAS 38 “Clarification of acceptable methods of depreciation and
amortisation”
• Amendments to IAS 1 “Disclosure initiative”
• Amendments to IAS 19 “Defined benefit plans: employee contributions”
• Amendments to IAS 27 “Equity method in separate financial statements”
• Amendments to IFRS 10 and IAS 28 “Sale or contribution of assets between an investor and its
associate or joint venture”
• Amendments to IFRS 10, IFRS 12 and IAS 28 “Investment entities: applying the consolidation
exemption”
• Annual improvements to IFRSs 2010-2012 cycle
• Annual improvements to IFRSs 2011-2013 cycle
• Annual improvements to IFRSs 2012-2014 cycle
The Group and the Company have not applied any new or revised IFRSs that are not yet effective for
the accounting year ended 31 March 2015.
UNIVISION ENGINEERING LIMITED - 30 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
4.1 Basis of consolidation
(a)
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The
Group controls an entity when the Group is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power over the
entity. Subsidiaries are consolidated from the date on which control is transferred to the Group.
They are deconsolidated from the date that control ceases. Inter-company transactions, balances and
unrealised gains on transactions between group companies are eliminated. Unrealised losses are also
eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
The Group uses the acquisition method of accounting to account for business combinations. The
consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred,
the liabilities incurred and the equity interests issued by the Group. The consideration transferred
includes the fair value of any asset or liability resulting from a contingent consideration arrangement.
Acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are measured initially at their fair values at
the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-
controlling interest in the acquiree either at fair value or at the non-controlling interest’s
proportionate share of the acquiree’s net assets.
Changes in the Group’s interests in a subsidiary that do not result in a loss of control are accounted
for as equity transactions, whereby adjustments are made to the amounts of controlling and non-
controlling interests within consolidated equity to reflect the change in relative interests, but no
adjustments are made to goodwill and no gain or loss is recognised.
(b) Separate financial statements
In the individual Company’s statement of financial position, interests in subsidiaries are accounted
for at cost less impairment loss. Cost includes direct attributable costs of investment. The results of
subsidiaries are accounted for by the Company on the basis of dividend received and receivable.
Impairment testing of the interests in subsidiaries is required upon receiving a dividend from these
investments if the dividend exceeds the total comprehensive income of the subsidiary for the period
the dividend is declared or, if the carrying amount of investment in the separate financial statements
exceeds the carrying amount in the consolidated financial statements, of the investee’s net assets
including goodwill.
UNIVISION ENGINEERING LIMITED - 31 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.1 Basis of consolidation (continued)
(c) Non-controlling interests
Non-controlling interests represent the equity in a subsidiary not attributable directly or indirectly to
the Company, and in respect of which the Group has not agreed any additional terms with the holders
of those interests which would result in the Group as a whole having a contractual obligation in
respect of those interests that meets the definition of a financial liability. For each business
combination, the Group can elect to measure any non-controlling interests either at fair value or at
the non-controlling interest’s proportionate share of the subsidiary’s net identifiable assets.
Non-controlling interests are presented in the consolidated statement of financial position within
equity, separately from equity attributable to the equity shareholders of the Company. Non-
controlling interests in the results of the Group are presented on the face of the consolidated
statement of comprehensive income as an allocation of the total profit or loss and total
comprehensive income for the year between non-controlling interests and the equity shareholders of
the Company.
4.2 Segment reporting
An operating segment is a component of the Group that engages in business activities from which it
may earn revenues and incurs expenses, including revenues and expenses that relate to transactions
with other components of the Group. Operating segments are reported in a manner consistent with
the internal reporting provided to the chief operating decision-maker. The Group’s Executive
Director, Mr. Stephen Sin Mo KOO is responsible for allocating resources and assessing
performance of the operating segments.
4.3 Foreign currency
(a)
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operates (“the functional
currency”). The Consolidated and Company financial statements are presented in Sterling Pound
(“£”), which is the Group’s presentation currency. As the Company is listed on AIM, the directors
consider that this presentation is more useful for its current and potential investors.
The functional currency of the Group’s entity is summarised as follows:
1. UniVision Engineering Limited
2. T-Com Technology Co. Limited
3. Leader Smart Engineering Limited
4. Leader Smart Engineering (Shanghai) Limited (“LSSH”)
Hong Kong Dollars
New Taiwan Dollars
Hong Kong Dollars
Renminbi Yuan
(“HK$”)
(“NTD”)
(“HK$”)
(“RMB”)
UNIVISION ENGINEERING LIMITED - 32 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.3 Foreign currency (continued)
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions or valuation where items are remeasured. Foreign
exchange gains and losses resulting from the settlement of such transactions and from the translation
at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in the statement of comprehensive income, except when deferred in other comprehensive
income as qualifying cash flow hedges and qualifying net investment hedges.
Foreign exchange gains and losses that relate to borrowings and cash and bank balances are
presented in the statement of comprehensive income within “finance income or cost”. All other
foreign exchange gains and losses are presented in the statement of comprehensive income within
“administrative expense” or “other income”.
Changes in the fair value of monetary securities denominated in foreign currency classified as
available for sale are analysed between translation differences resulting from changes in the
amortised cost of the security and other changes in the carrying amount of the security. Translation
differences in respect of changes in amortised cost are recognised in profit or loss, and other changes
in carrying amount are recognised in other comprehensive income.
Translation differences on non-monetary financial assets and liabilities such as equities held at fair
value through profit or loss are recognised in profit or loss as part of the fair value gain or loss.
Translation differences on non-monetary financial assets, such as equities classified as available for
sale, are included in other comprehensive income.
(c) Group companies
The results and financial position of all the group entities (none of which has the currency of a hyper-
inflationary economy) that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
(i)
(ii)
assets and liabilities for each statement of financial position presented are translated at the
closing rate at the end of the reporting period;
income and expenses for each statement of comprehensive income are translated at average
exchange rates (unless this average is not a reasonable approximation of the cumulative effect
of the rates prevailing on the transaction dates, in which case income and expenses are
translated at the rate on the dates of the transactions); and
(iii) all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of the net investment in foreign
operations, and of loan and borrowings and other currency instruments designated as hedges of such
investments, are taken to other comprehensive income. When a foreign operation is partially
disposed of or sold, exchange differences that were recorded in equity are recognised in the
statement of comprehensive income as part of the gain or loss on sale. Goodwill and fair value
adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the closing rate.
UNIVISION ENGINEERING LIMITED - 33 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.4 Plant and equipment
Plant and equipment is initially recognised at cost and subsequently carried at cost less accumulated
depreciation and accumulated impairment loss. The cost of an asset comprises its purchase price and
any directly attributable costs of bringing the asset to working condition for its intended use.
On disposal of an item of plant and equipment, the difference between the net disposal proceeds and
its carrying amount is taken to profit or loss.
Depreciation is calculated using the straight-line method to allocate their depreciable amounts over
the estimated useful lives as follows:
Furniture and fixtures
Computer equipment
Motor vehicles
Research assets
3 - 5 years
2 - 5 years
3 years
3 - 5 years
Fully depreciated plant and equipment is retained in the financial statements until the items are no
longer in use and no further charge for depreciation is made in respect of these assets.
The residual values, useful life and depreciation method are reviewed at the end of each reporting
period to ensure that the amount, method and period of depreciation are consistent with previous
estimates and the expected pattern of consumption of the future economic benefits embodied in the
items of plant and equipment. The effects of any revision are recognised in profit or loss when the
changes arise.
Subsequent expenditure relating to plant and equipment that has already been recognised is added to
the carrying amount of the asset only when it is probable that future economic benefits associated
with the item will flow to the Group and the cost of the item can be measured reliably. All other
repair and maintenance expenses are recognised in profit or loss when incurred.
4.5 Goodwill
Goodwill represents the excess of:
(a)
the aggregate of the fair value of the consideration transferred, the amount of any non-
controlling interest in the acquiree and the fair value of the Group’s previously held equity
interest in the acquiree; over
(b)
the net fair value of the acquiree’s identifiable assets and liabilities measured as at the
acquisition date.
When (b) is greater than (a), then this excess is recognised immediately in profit or loss as a gain on
a bargain purchase.
Goodwill is stated at cost less accumulated impairment losses. Goodwill arising on a business
combination is allocated to each cash-generating unit, or groups of cash generating units, that is
expected to benefit from the synergies of the combination and is tested annually for impairment. On
disposal of a cash generating unit during the year, any attributable amount of purchased goodwill is
included in the calculation of the profit or loss on disposal.
UNIVISION ENGINEERING LIMITED - 34 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.6
Impairment of assets
The carrying amounts of non-current assets, such as plant and equipment, are reviewed at the end of
each reporting period to determine whether there is any indication of impairment. If any such
indication exists, the recoverable amount is estimated. In addition, for goodwill, the recoverable
amount is estimated annually whether or not there is any indication of impairment.
Calculation of recoverable amount
The recoverable amount of an asset is the greater of its fair value less costs of disposal and value in
use. In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the asset. Where an asset does not generate cash inflows largely independent of
those from other assets, the recoverable amount is determined for the smallest group of assets that
generates cash inflows independently (i.e. a cash-generating unit).
Recognition of impairment losses
An impairment loss is recognised in profit or loss if the carrying amount of an asset, or the cash-
generating unit to which it belongs, exceeds the recoverable amount. Impairment losses recognised
in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill
allocated to the cash-generating unit (or group of units) and then, to reduce the carrying amount of
the other assets in the unit (or group of units) on a pro rata basis, except that the carrying value of an
asset will not be reduced below its individual fair value less costs of disposal (if measurable), or
value in use (if determinable).
Reversals of impairment losses
In respect of assets other than goodwill, an impairment loss is reversed if there has been a favourable
change in the estimates used to determine the recoverable amount. An impairment loss in respect of
goodwill is not reversed (including those provided during the interim financial reporting).
A reversal of an impairment loss is limited to the asset’s carrying amount that would have been
determined had no impairment loss been recognised in prior years. Reversals of impairment losses
are credited to profit or loss in the year in which the reversals are recognised.
4.7
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the
weighted average method and comprises design costs, raw materials, direct labour, other direct costs
and other costs incurred in bringing the inventories to their present location and condition. Net
realisable value is the estimated selling price in the ordinary course of business less the estimated
costs of completion and the estimated costs necessary to make the sale.
UNIVISION ENGINEERING LIMITED - 35 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.8 Financial instruments
Financial assets and financial liabilities are recognised when a group entity becomes a party to the
contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities are added to
or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial
recognition.
4.8.1 Financial assets
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market. Subsequent to initial recognition, loans and receivables (including
trade and other receivables and bank balances and cash) are measured at amortised cost using the
effective interest method, less any impairment (see accounting policy on impairment of loans and
receivables below).
Interest income is recognised by applying the effective interest rate, except for short-term receivables
where the recognition of interest would be immaterial.
Type of item
1. Bills receivable
Nature and terms of item
Certain customers pay accounts receivable with bills receivable
from Taiwan banks with maturities less than twelve months.
These are also referred to as “bankers” acceptances, which are
unsecured, interest-free and to be matured in twelve months.
2. Loans
Unsecured temporary advances to the subsidiaries, which are
interest-free and eliminated upon consolidation.
3. Other receivables
They include:
a. Retention receivable under warranty provision among certain
construction contracts for a period of twelve months
b. Accrued income from maintenance contracts, which are billed
or collected within twelve months.
UNIVISION ENGINEERING LIMITED - 36 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.8 Financial instruments (continued)
4.8.1 Financial assets (continued)
Impairment of loans and receivables
Loans and receivables are assessed for indicators of impairment at the end of each reporting period.
Loans and receivables are considered to be impaired when there is objective evidence that, as a result
of one or more events that occurred after the initial recognition of the loans and receivables, the
estimated future cash flows of loans and receivables have been affected.
Objective evidence of impairment could include:
•
significant financial difficulty of the issuer or counterparty; or
• breach of contract, such as default or delinquency in interest and principal payments; or
•
it becoming probable that the borrower will enter bankruptcy or financial re-organisation.
For certain categories of loans and receivables, such as trade receivables, assets that are assessed not
to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective
evidence of impairment for a portfolio of receivables could include the Group’s past experience of
collecting payments, an increase in the number of delayed payments in the portfolio past the average
credit period and observable changes in national or local economic conditions that correlate with
default on receivables.
The amount of the impairment loss recognised is the difference between the asset’s carrying amount
and the present value of the estimated future cash flows discounted at the loans and receivables’
original effective interest rate.
The carrying amount of loans and receivables is reduced by the impairment loss directly for all loans
and receivables with the exception of trade receivables, where the carrying amount is reduced
through the use of an allowance account. Changes in the carrying amount of the allowance account
are recognised in profit or loss. When a trade receivable is considered uncollectible, it is written off
against the allowance account. Subsequent recoveries of amounts previously written off are credited
to profit or loss.
If, in a subsequent period, the amount of impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognised, the previously recognised
impairment loss is reversed through profit or loss to the extent that, the carrying amount of the loan
and receivable at the date the impairment is reversed does not exceed what the amortised cost would
have been had the impairment not been recognised.
UNIVISION ENGINEERING LIMITED - 37 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.8 Financial instruments (continued)
4.8.2 Financial liabilities and equity instruments
Debt and equity instruments issued by a group entity are classified as either financial liabilities or as
equity in accordance with the substance of the contractual arrangements and the definitions of a
financial liability and an equity instrument.
Equity instrument
An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds
received, net of direct issue costs.
Financial liabilities
Financial liabilities (including trade and other payables and loan and borrowings) are subsequently
measured at amortised cost, using the effective interest method.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial liability and
of allocating interest expense over the relevant period. The effective interest rate is the rate that
exactly discounts estimated future cash payments (including all fees paid or received that form an
integral part of the effective interest rate, transaction costs and other premiums or discounts) through
the expected life of the financial liability or, where appropriate, a shorter period, to the net carrying
amount on initial recognition. Interest expense is recognised on an effective interest basis.
Derecognition
The Group derecognises a financial asset only when the contractual rights to the cash flows from the
asset expire, or when it transfers the financial asset and substantially all the risks and rewards of
ownership of the asset to another entity.
On derecognition of a financial asset in its entirety, the difference between the asset’s carrying
amount and the sum of the consideration received and receivable and the cumulative gain or loss that
had been recognised in other comprehensive income and accumulated in equity is recognised in
profit or loss.
The Group derecognises financial liabilities when, and only when, the Group’s obligations are
discharged, cancelled or expire. The difference between the carrying amount of the financial liability
derecognised and the consideration paid and payable is recognised in profit or loss.
4.8.3 Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the statement of financial
position when there is a legally enforceable right to offset the recognised amounts and there is an
intention to settle on a net basis or realise the asset and settle the liability simultaneously.
UNIVISION ENGINEERING LIMITED - 38 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.9 Trade and other receivables
Trade and other receivables are initially recognised at fair value and thereafter stated at amortised
cost less allowance for impairment of bad and doubtful debts, except where the receivables are
interest-free loans made to related parties without any fixed repayment terms or the effect of
discounting would be immaterial. In such cases, the receivables are stated at cost less allowance for
impairment of bad and doubtful debts.
4.10 Bank deposits
They represent bank deposits with maturities greater than three months, which are restricted as bank
deposits held as collateral for performance bonds issued by the bank to customers.
4.11 Cash and cash equivalents
In the statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call
with banks and other short-term highly liquid investments with original maturities of three months or
less.
4.12 Trade and other payables
Trade and other payables are initially recognised at fair value and subsequently stated at amortised
cost unless the effect of discounting would be immaterial, in which case they are stated at cost.
4.13 Interest-bearing borrowings
Interest-bearing borrowings are initially recognised at fair value less transaction costs. Subsequent to
initial recognition, the interest-bearing borrowings are stated at amortised cost with any difference
between the amount initially recognised and redemption value being recognised in the consolidated
statement of comprehensive income over the period of the borrowings together with any interest and
fees payable using the effective interest method.
4.14 Share capital
Ordinary shares are classified as equity. Mandatorily redeemable preference shares are classified as
liabilities. Incremental costs directly attributable to the issue of new shares or options are shown in
equity as a deduction, net of tax, from the proceeds.
UNIVISION ENGINEERING LIMITED - 39 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.15 Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods
and rendering of services in the ordinary course of the Group’s activities. Revenue is shown net of
business tax, value-added tax, rebates and discounts, and after eliminating sales within the Group.
The Group recognises revenue when the amount of revenue and related cost can be reliably
measured, it is probable that future economic will flow to the entity and when specific criteria have
been met for each of the Group’s activities as described below. The amount of revenue is not
considered to be reliably measurable until all contingencies relating to the sale have been resolved.
The Group bases its estimates on historical results, taking into consideration the type of customer,
the type of transaction and the specifics of each arrangement.
(i)
Construction contracts
Revenue from construction contracts is recognised when the outcome of a construction
contract can be estimated reliably:
revenue from a fixed price contract is recognised using the percentage of completion
method, measured by reference to the percentage of contract costs incurred to date to
estimated total contract costs for the contract; and
revenue from a cost plus contract is recognised by reference to the recoverable costs
incurred during the period plus an appropriate proportion of the total fee, measured by
reference to the proportion that costs incurred to date bear to the estimated total costs of
the contract.
When the outcome of a construction contract cannot be estimated reliably, revenue is
recognised only to the extent of contract costs incurred that it is probable will be recoverable.
(ii) Maintenance contracts
Revenue from maintenance contracts is recognised on a straight line basis over the term of the
maintenance contract.
(iii) Product sales
Revenue from product sales is recognised on the transfer of risks and rewards of ownership,
which generally coincides with the delivery of goods to customers and the passing of title to
customers.
(iv)
Interest income
Interest income is recognised as it accrues using the effective interest method.
(v) Dividend income
Dividend income from investments is recognised when the shareholder’s right to receive
payment has been established (provided that it is probable that the economic benefits will flow
to the Company and the amount of income can be measured reliably).
UNIVISION ENGINEERING LIMITED - 40 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.16 Construction contracts
When the outcome of a construction contract can be estimated reliably, contract costs are recognised
as an expense by reference to the stage of completion of the contract at the end of the reporting
period. When it is probable that total contract costs will exceed total contract revenue, the expected
loss is recognised as an expense immediately. When the outcome of a construction contract cannot
be estimated reliably, contract costs are recognised as an expense in the period in which they are
incurred.
Contracts in progress at the end of the reporting period are recorded in the statement of financial
position at the net amount of costs incurred plus recognised profit less recognised losses and progress
billings, and are presented under the caption of “Trade and other receivables” or “Trade and other
payables” in the statement of financial position as the “Amounts due from customers for contracts-
in-progress” (as an asset) or the “Amounts due to customers for contracts-in-progress” (as a
liability), as applicable. Progress billings not yet paid by the customer are included in the statement
of financial position. Amounts received before the related work is performed are included in the
statement of financial position, as a liability, as “Advances received”.
4.17 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying
assets, which are assets that necessarily take a substantial period of time to get ready for their
intended use or sale are added to the cost of those assets until such time as the assets are substantially
ready for their intended use or sale. Investment income earned on the temporary investment of
specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing
costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
4.18 Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the
risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
The Group as lessor
Rental income from operating leases is recognised in profit or loss on a straight-line basis over the
term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease
are added to the carrying amount of the leased asset and recognised as an expense on a straight-line
basis over the lease term.
The Group as lessee
Operating lease payments are recognised as an expense on a straight-line basis over the lease term.
In the event that lease incentives are received to enter into operating leases, such incentives are
recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental
expense on a straight-line basis.
UNIVISION ENGINEERING LIMITED - 41 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.19 Employee benefit
These comprise short term employee benefits and contributions to defined contribution retirement
plans.
Short-term employee benefits, including salaries, annual bonuses, paid annual leave, leave passage,
contributions to defined contribution retirement plans and the cost of non-monetary benefits are
accrued in the year in which the associated services are rendered by employees of the Group. Where
payment or settlement is deferred and the effect would be material, these amounts are stated at their
present values.
Contributions to the defined contribution scheme are charged to profit or loss when incurred.
4.20 Income tax
Income tax expense for the year comprises current and deferred tax. Tax is recognised in the
statement of comprehensive income, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other
comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at the end of the reporting period in the countries where the Company and its subsidiaries
operate and generate taxable income. Management periodically evaluates positions taken in tax
returns with respect to situations in which applicable tax regulation is subject to interpretation. It
establishes provisions where appropriate on the basis of amounts expected to be paid to the tax
authorities.
Deferred income tax is recognised, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial
statements. However, deferred tax liabilities are not recognised if they arise from the initial
recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition
of an asset or liability in a transaction other than a business combination that at the time of the
transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined
using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting
period and are expected to apply when the related deferred income tax asset is realised or the
deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable
profit will be available against which the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and
associates, except for deferred income tax liability where the timing of the reversal of the temporary
difference is controlled by the Group and it is probable that the temporary difference will not reverse
in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset
current tax assets against current tax liabilities and when the deferred income taxes assets and
liabilities relate to income taxes levied by the same taxation authority on either the same taxable
entity or different taxable entities where there is an intention to settle the balances on a net basis.
UNIVISION ENGINEERING LIMITED - 42 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4.21 Financial guarantees issued, provisions and contingent liabilities
(i)
Financial guarantees issued
Financial guarantees are contracts that require the issuer (i.e. the “guarantor”) to make specified
payments to reimburse the beneficiary of the guarantee (the “holder”) for a loss the holder incurs
because a specified debtor fails to make payment when due in accordance with the terms of a debt
instrument.
Where the Group issues a financial guarantee, the fair value of the guarantee is initially recognised as
deferred income within trade and other payables. The fair value of financial guarantees issued at the
time of issuance is determined by reference to fees charged in an arm’s length transaction for similar
services, when such information is obtainable, or is otherwise estimated by reference to interest rate
differentials, by comparing the actual rates charged by lenders when the guarantee is made available
with the estimated rates that lenders would have charged, had the guarantees not been available,
where reliable estimates of such information can be made. Where consideration is received or
receivable for the issuance of the guarantee, the consideration is recognised in accordance with the
Group’s policies applicable to that category of asset. Where no such consideration is received or
receivable, an immediate expense is recognised in profit or loss on initial recognition of any deferred
income.
The amount of the guarantee initially recognised as deferred income is amortised in profit or loss and
provisions are recognised in accordance with (ii) below if and when (1) it becomes probable that the
holder of the guarantee will call upon the Group under the guarantee, and (2) the amount of that
claim on the Group is expected to exceed the amount currently carried in trade and other payables in
respect of that guarantee, i.e. the amount initially recognised, less accumulated amortisation.
(ii) Other provisions and contingent liabilities
Provisions are recognised for other liabilities of uncertain timing or amount when the Group or the
Company has a legal or constructive obligation arising as a result of a past event, it is probable that
an outflow of economic benefits will be required to settle the obligation and a reliable estimate can
be made. Where the time value of money is material, provisions are stated at the present value of the
expenditure expected to settle the obligation.
4.22 Dividend distributions
Dividend distributions to the Company’s shareholders are recognised as liabilities in the Group’s and
the Company’s financial statements in the period in which the dividends are approved by the
Company’s shareholders or directors, where appropriate.
4.23 Events after the reporting period
Events after the reporting period that provide additional information about the Group’s and the
Company’s position at the end of the reporting period or those that indicate the going concern
assumption is not appropriate are adjusting events and are reflected in the financial statements.
Events after the reporting period that are not adjusting events are disclosed in the notes to the
financial statements when material.
UNIVISION ENGINEERING LIMITED - 43 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
5.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Critical judgements in applying accounting policies
In the process of applying the accounting policies, Management has made the following judgements
that have the most significant effect on the amounts recognised in the financial statements (apart
from those involving estimations, which are dealt with below).
(i)
Estimation of contract costs
Estimated costs to complete contracts are judged by the Directors through the application of their
experience and knowledge of the industry in which the Group operates. However, contract
performance can be difficult to predict accurately. The Directors believe that contract budgets do not
deviate materially from actual costs incurred due to a strong cost control system with regular reviews
of budgets which highlight any incidences that could affect estimated costs to completion.
The key assumptions concerning the future and other key sources of estimation uncertainty at the end
of the reporting periods, that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the
end of the reporting period, that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year, are discussed below.
(i)
Impairment of assets
The Group has to exercise judgement in determining whether an asset is impaired or the event
previously causing the asset impairment no longer exists, particularly in assessing: (1) whether an
event has occurred that may affect the asset value or such event affecting the asset value has not been
in existence; (2) whether the carrying value of an asset can be supported by the net present value of
future cash flows which are estimated based upon the continued use of the asset or derecognition;
and (3) the appropriate key assumptions to be applied in preparing cash flow projections including
whether these cash flow projections are discounted using an appropriate rate. Changing the
assumptions selected by management to determine the level of impairment, including the discount
rates or the growth rate assumptions in the cash flow projections, could materially affect the net
present value used in the impairment test.
UNIVISION ENGINEERING LIMITED - 44 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
5.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
Key sources of estimation uncertainty (continued)
(ii)
Impairment of trade and other receivables
The estimation of impairment of trade and other receivables includes an assessment of recoverability
of individual account balances and a review of ageing analysis of trade and other receivables by the
Directors. The Directors will also review the credit history of customers in assessing the
recoverability of trade and other receivables. When any indication comes to their attention that a
trade and other receivable might not be recovered in full, impairment will be made and recognised as
an expense in the consolidated statement of comprehensive income. As at 31 March 2015, the total
carrying amount of trade and other receivables was £4,323,003 (2014: £14,299,649).
(iii) Plant and equipment and depreciation
The Group determines the estimated useful lives, residual values and related depreciation charges for
the Group’s plant and equipment. This estimate is based on the historical experience of the actual
useful lives and residual values of plant and equipment of similar nature and functions. The Group
will revise the depreciation charge where useful lives and residual values are different to those
previously estimated, or it will write-off or write-down technically obsolete or non-strategic assets
that have been abandoned or sold.
(iv)
Income taxes
The Group is subject to income tax in different jurisdiction in Hong Kong, Taiwan and the PRC.
Significant estimates are required in determining the provision for income taxes. There are many
transactions and calculations for which the ultimate tax determination is uncertain during the
ordinary course of business. Where the final tax outcome of these matters is different from the
amounts that were initially recorded, such differences will impact the income tax and deferred tax
provisions in the period in which such determination is made.
As at 31 March 2015, the Group has unused tax losses of £4,746,391 (2014: £4,561,755) available
for offset against future profits. A deferred tax asset of £783,154 (2014: £752,681) has not been
recognised in respect of the unused tax losses. In cases where there are future profits generated to
utilise the tax losses, a material deferred tax asset may arise, which would be recognised in the
consolidated statement of comprehensive income for the period in which such future profits are
recorded.
UNIVISION ENGINEERING LIMITED - 45 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
6.
FINANCIAL INSTRUMENTS
(a) Categories of financial instruments
Financial assets:
Loans and receivables
- Trade and other receivables
- Bank deposits
- Cash and bank balances
Financial liabilities:
- Trade and other payables
- Loan and borrowings
- Obligation under finance lease
2015
£
2014
£
4,323,003
251,641
1,221,707
14,299,649
223,865
379,860
3,242,616
1,122,052
8,335
4,544,953
440,582
14,259
(b) Financial risk management objectives and policies
The Group’s major financial instruments include loan and borrowings, trade and other receivables
and trade and other payables. Details of these financial instruments are disclosed in the respective
notes. The risks associated with these financial instruments include currency risk, interest rate risk,
credit risk and liquidity risk. The policies on how these risks are mitigated are set out below.
Management manages and monitors these exposures to ensure appropriate measures are
implemented in a timely and effective manner.
(i) Market risk
(1) Currency risk
Certain entities in the Group have foreign currency transactions and have foreign currency
denominated monetary assets and liabilities, which expose the Group to foreign currency risk.
The Company has foreign currency transactions, which expose the Company to foreign
currency risk.
The carrying amounts of the Group’s and the Company’s foreign currency denominated
monetary assets and monetary liabilities, mainly represented by trade and other receivables,
cash and bank balances, trade and other payables and loan and borrowings, at the end of the
reporting period are as follows:
The Group
The Company
Assets
Liabilities
Assets
Liabilities
2015
2014
2015
2014
2015
2014
2015
2014
NTD
RMB
USD
HK$
123,413,717
1,129
54,560
34,982,030
77,729,425
113,969,896
23,444
29,993,818
100,013,562
5,009,660
21,320
19,577,077
56,222,390
42,914,220
-
12,218,181
-
-
-
34,980,407
-
-
-
28,884,579 `
-
5,009,660
-
19,481,353
-
5,081,515
-
12,034,097
The Group currently does not have any policy on hedges of foreign currency risk. However,
management monitors the foreign currency risk exposure and will consider hedging significant
foreign currency risk should the need arise.
UNIVISION ENGINEERING LIMITED - 46 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(i) Market risk (continued)
(1) Currency risk (continued)
Sensitivity analysis
The following table details the Group’s sensitivity to a 5% increase and decrease in Sterling
against the relevant foreign currencies and all other variables were held constant. 5% (2014:
5%) is the sensitivity rate used when reporting foreign currency risk internally to key
management personnel and represents management’s assessment of the reasonably possible
change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign
currencies denominated monetary items and adjusts their translation at the end of the reporting
period for a 5% (2014: 5%) change in foreign currency rates. A positive/(negative) number
indicates a decrease/(increase) in post-tax profit/(loss) for the year when Sterling strengthens
5% (2014: 5%) against the relevant foreign currencies. For a 5% (2014: 5%) weakening of
Sterling against the relevant currency, there would be an equal but opposite impact on the
post-tax profit/(loss) for the year.
NTD
Post-tax profit for the year
RMB
Post-tax (loss)/profit for the year
USD
Post-tax profit for the year
HK$
Post-tax profit for the year
(2) Interest rate risk
2015
£
2014
£
26,609
22,310
(28,670)
361,753
1,188
746
70,595
72,468
The Group and the Company is exposed to fair value interest rate risk in relation to fixed rate
bank deposits and borrowings at fixed rates. The Group and the Company is exposed to cash
flow interest rate risk due to fluctuation of the prevailing market interest rate on certain bank
borrowings which carry at prevailing market interest rates as shown in note 25. The Group
currently does not have an interest rate hedging policy. However, Management monitors
interest rate exposure and will consider hedging significant interest rate exposure should the
need arises.
The Group’s and the Company’s exposures to interest rates on financial liabilities are detailed
in the liquidity risk management section of this note.
UNIVISION ENGINEERING LIMITED - 47 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(i) Market risk (continued)
(2) Interest rate risk (continued)
Sensitivity analysis
The sensitivity analysis below has been determined based on the change in interest rates and
the exposure to interest rates for the non-derivative financial liabilities at the end of the
reporting period and on the assumption that the amount outstanding at the end of the reporting
period was outstanding for the whole year and held constant throughout the financial year.
The 25 basis points increase or decrease represents the Management’s assessment of a
reasonably possible change in interest rates over the period until the next fiscal year. The
analysis is performed on the same basis for 2014.
For the year ended 31 March 2015, if interest rates had been 25 basis points higher/lower, with
all other variables held constant, the Group’s post-tax profit for the year would
increase/decrease by approximately £2,117 (2014: £1,425).
(ii) Credit risk
At 31 March 2015, the Group’s and the Company’s maximum exposure to credit risk in the
event of the counterparties’ failure to perform their obligations in relation to each class of
recognised financial assets is the carrying amount of those assets as stated in the consolidated
statement of financial position.
The Group’s credit risk is primarily attributable to its trade and other receivables. In order to
minimise the credit risk, the Management of the Group has a credit policy in place and the
exposures to these credit risks are monitored on an ongoing basis. Credit evaluations of its
customers’ financial position and condition are performed on each and every major customer
periodically. These evaluations focus on the customer’s past history of making payments
when due and current ability to pay, and take into account information specific to the customer
as well as pertaining to the economic environment in which the customer operates. Debts are
usually due within 90 days from the date of billing.
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of
each customer. The default risk of the industry and country in which customers operate also
has an influence on credit risk. At the end of the reporting period, the Group had no significant
concentrations of credit risk where individual trade and other receivables balance exceed 10%
of the total trade and other receivables at the end of the reporting period.
The credit risk on liquid funds is limited because the counterparties are banks with high credit
ratings assigned by international credit rating agencies. Also, the Group has no significant
concentration of credit risk, with exposure spread over a number of counterparties and
customers.
Further quantitative disclosures in respect of the Group’s and the Company’s exposure to
credit risk arising from trade and other receivables are set out in note 21.
UNIVISION ENGINEERING LIMITED - 48 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(iii) Liquidity risk
In managing the liquidity risk, the Group’s policy is to regularly monitor and maintain an
adequate level of cash and cash equivalents determined by Management to finance the Group’s
operations. Management also needs to ensure the continuity of funding for both the short and
long terms, and to mitigate the effects of cash flow fluctuation. At 31 March 2015, the Group
had aggregate banking facilities of £2,412,189 (2014: £2,194,840), of which £1,290,137 were
unused (2014: £1,754,258).
The following table details the contractual maturities of the Group’s and the Company’s
financial liabilities at the end of the reporting period, which is based on the undiscounted cash
flows and the earliest date on which the Group can be required to pay. The table includes both
interest and principal cash flows.
The Group
Non-derivative
financial
liabilities:
Loan and
borrowings
Trade and other
payables
Obligations under
finance lease
Financial guarantee
Maximum amount
guaranteed
2015
Weighted
average
effective
Within
1 year
or on
interest rate Demand
%
£
More than
1 year but
less than
2 years
£
More than
2 years but
less than
5 years
£
Total
undiscounted
cash flow
£
Carrying
amount
at 31
March 2015
£
3.64% -
3.76%
1,127,117
3,242,616
3.25%
8,944
4,378,677
-
-
745
745
-
-
-
-
-
-
-
1,127,117
1,122,052
3,242,616
3,242,616
9,689
8,335
4,379,422
4,373,003
-
-
UNIVISION ENGINEERING LIMITED - 49 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(iii) Liquidity risk (continued)
The Group
2014
Weighted
average
effective
Within
1 year
or on
interest rate Demand
%
£
More than
1 year but
less than
2 years
£
More than
2 years but
less than
5 years
£
Total
undiscounted
cash flow
£
Carrying
amount
at 31
March 2014
£
Non-derivative
financial
liabilities:
Loan and
borrowings
Trade and other
payables
Obligations under
finance lease
Financial guarantee
Maximum amount
guaranteed
The Company
Non-derivative
financial
liabilities:
Loan and borrowings
Trade and other
payables
Obligations under
finance lease
3.64% -
3.76%
445,213
4,544,953
3.25%
7,956
4,998,122
-
-
7,956
7,956
-
-
445,213
440,582
4,544,953
4,544,953
664
16,576
14,259
664
5,006,742
4,999,794
7,860,000
-
-
7,860,000
7,860,000
2015
Weighted
average
effective
interest rate
%
Within
1 year
or on
demand
£
More than
1 year but
less than
2 years
£
More than
2 years but
less than
5 years
£
Total
undiscounted
cash flow
£
Carrying
Amount
at 31
March 2015
£
-
2,257,803
3.25%
8,944
2,266,747
-
-
745
745
-
-
-
-
-
-
2,257,803
2,257,803
9,689
8,335
2,267,492
2,266,138
UNIVISION ENGINEERING LIMITED - 50 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(b) Financial risk management objectives and policies (continued)
(iii) Liquidity risk (continued)
The Company
2014
Weighted
average
effective
interest rate
%
Within
1 year
or on
demand
£
More than
1 year but
less than
2 years
£
More than
2 years but
less than
5 years
£
Total
undiscounted
cash flow
£
Carrying
Amount
at 31
March 2014
£
Non-derivative
financial
liabilities:
Loan and borrowings
Trade and other
payables
Obligations under
finance lease
(c)
Fair value
-
1,444,776
3.25%
7,956
1,452,732
-
-
7,956
7,956
-
-
-
-
1,444,776
1,444,776
664
16,576
14,259
664
1,461,352
1,459,035
The fair values of financial assets and financial liabilities are determined in accordance with
generally accepted pricing models based on discounted cash flow analysis. Balances with
subsidiaries are unsecured, interest free and have no fixed repayment terms.
The Directors of the Company consider that the carrying amounts of financial assets and
financial liabilities recorded at amortised cost in the financial statements approximate to their
fair values at the end of the reporting period.
(d) Capital risk management
The Group’s primary objectives when managing capital are to safeguard the Group’s ability to
continue as a going concern, so that it can continue to provide returns for shareholders and
benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost
of capital.
The Group actively and regularly reviews and manages its capital structure to maintain a
balance between the higher shareholder returns that might be possible with a higher level of
borrowings and the advantages and security afforded by a sound capital position, and makes
adjustments to the capital structure in light of changes in economic conditions.
The Group monitors its capital structure on the basis of a net debt-to-adjusted capital ratio.
For this purpose the Group defines net debt as total debt (which includes bank borrowings and
other financial liabilities) less bank deposits and cash and cash equivalents. Adjusted capital
comprises all components of equity less unaccrued proposed dividends.
UNIVISION ENGINEERING LIMITED - 51 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
6.
FINANCIAL INSTRUMENTS (CONTINUED)
(d) Capital risk management (continued)
During 2015, the Group’s strategy, which was unchanged from 2014, was to maintain the net
debt-to-adjusted capital ratio as low as feasible. In order to maintain or adjust the ratio, the
Group may adjust the amount of dividends paid to shareholders, return capital to shareholders,
issue new shares or sell assets to reduce debt.
Neither the Company nor any of its subsidiary undertakings are subject to externally imposed
capital requirements.
The net debt-to-adjusted capital ratios of the Group and the Company at the end of the
reporting period were as follows:
Current liabilities
Trade and other payables
Loan and borrowings
Current tax liability
Obligation under finance lease
Non-current liabilities
Obligation under finance lease
The Group
The Company
2015
£
3,242,616
1,122,052
34,442
7,694
4,406,804
2014
£
4,544,953
440,582
1,226,973
6,844
6,219,352
2015
£
2,257,803
-
-
7,694
2,265,497
2014
£
1,444,776
-
-
6,844
1,451,620
641
7,415
641
7,415
Total debt
4,407,445
6,226,767
2,266,138
1,459,035
Less: cash and bank balances
1,221,707
379,860
1,044,484
160,210
Net debt
Total equity
3,185,738
5,846,907
1,221,654
1,298,825
5,641,264
11,129,719
4,823,282
4,322,811
Net debt-to-adjusted capital
ratio
56%
53%
25%
30%
UNIVISION ENGINEERING LIMITED - 52 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
7.
SEGMENT INFORMATION
Management has determined the operating segments based on the reports reviewed by the chief
operating decision maker, being the chief executive officer, that are used to make strategic decisions.
Information reported to the chief operating decision maker for the purpose of resource allocation and
assessment of segment performance focuses on types of goods or services delivered or provided. The
Group’s reportable operating segments are summarised as follows:
-
-
Security and surveillance
Electrical and mechanical #
# Electrical and mechanical business was discontinued in the current year and demerged from the
Group by distribution of a dividend in specie to its shareholders on 31 March 2015 (see note 31).
(a)
Segment revenues and results
The following is an analysis of the Group’s revenue and results by operating segment:
Security and
surveillance
£
Year ended 31 March 2015
Electrical and
mechanical #
£
Total
£
Segment revenue by major products and services:
- Construction contracts
- Maintenance contracts
- Product sales
Revenue from external customers
Segment profit/(loss)
Finance costs
Profit/(loss) before income tax
3,334,783
2,778,722
600,486
6,713,991
51,129
-
-
51,129
3,385,912
2,778,722
600,486
6,765,120
156,590
(26,401)
130,189
(30,657)
-
(30,657)
125,933
(26,401)
99,532
Security and
surveillance
£
Year ended 31 March 2014
Electrical and
mechanical #
£
Total
£
Segment revenue by major products and services:
- Construction contracts
- Maintenance contracts
- Product sales
Revenue from external customers
Segment profit/(loss)
Finance costs
Profit/(loss) before income tax
5,634,350
2,564,746
655,706
8,854,802
71,158
-
-
71,158
5,705,508
2,564,746
655,706
8,925,960
3,018,730
(20,787)
2,997,943
(79,714)
-
(79,714)
2,939,016
(20,787)
2,918,229
UNIVISION ENGINEERING LIMITED - 53 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
7.
SEGMENT INFORMATION (CONTINUED)
(b)
Segment assets and liabilities
The following is an analysis of the Group’s assets and liabilities by operating segment:
Segment assets
Unallocated assets
Consolidated total assets
Segment liabilities
Unallocated liabilities
Consolidated total liabilities
Segment assets
Unallocated assets
Consolidated total assets
Segment liabilities
Unallocated liabilities
Consolidated total liabilities
Security and
surveillance
£
At 31 March 2015
Electrical and
mechanical #
£
Total
£
10,048,709
-
10,048,709
4,407,445
-
4,407,445
-
-
-
-
-
-
10,048,709
-
10,048,709
4,407,445
-
4,407,445
Security and
surveillance
£
At 31 March 2014
Electrical and
mechanical #
£
Total
£
4,913,700
-
4,913,700
12,442,786
-
12,442,786
17,356,486
-
17,356,486
2,567,164
-
2,567,164
3,659,603
-
3,659,603
6,226,767
-
6,226,767
UNIVISION ENGINEERING LIMITED - 54 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
7.
SEGMENT INFORMATION (CONTINUED)
(c) Other segment information
Amounts regularly provided to the chief operating decision maker but not included in the measure of
segment profit or segment assets and not allocated to any operating segments:
Security and
surveillance
£
Year ended 31 March 2015
Electrical and
mechanical #
£
Total
£
Capital expenditure
Depreciation
35,554
36,172
-
-
35,554
36,172
Security and
surveillance
£
Year ended 31 March 2014
Electrical and
mechanical #
£
Total
£
Capital expenditure
Depreciation
16,002
49,086
-
-
16,002
49,086
*
Capital expenditure represented plant and equipment.
(d) Geographical segments
In determining the Group’s geographical segments, revenues are attributed to the segments based on
the location of the customers and assets are attributed to the segments based on the location of the
assets.
No further geographical segment information is presented as the Group’s revenue is materially
derived from customers based in one geographic segment comprising Hong Kong, Macau, Taiwan
and the PRC, and all of the Group’s assets are located in the same geographic segment.
(e)
Information about major customers
Revenues of approximately £1,695,699 (2014: £4,485,347) are derived from one single external
customers (2014: three), who contributed to 10% or more of the Group’s revenue for 2015 fiscal year.
UNIVISION ENGINEERING LIMITED - 55 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
8. OTHER INCOME
Interest income
Sundry income
9. OTHER GAINS AND LOSSES
Gain/(loss) on disposal of plant and equipment
Foreign exchange gains
Impairment loss recognised on trade and other receivables
Recovery from bad debts (note 21(a))
Reversal of allowance for obsolete inventories
Write-off of inventories
Gain from forgiveness of debt
10. EXPENSES BY NATURE
Cost of inventories recognised as expenses
Sub-contracting costs
Allowance for obsolete inventories
Depreciation – leased plant and equipment
Depreciation – owned plant and equipment
Operating lease charges – minimum lease payments
Research and development costs
Selling and distribution cost
Other expenses
Staff costs, including directors’ remuneration
- Wages and salaries
- Pension scheme contributions
2015
£
2014
£
1,223
1,703
2,926
1,293
9,225
10,518
2015
£
2014
£
155
1,588
(40,594)
16,508
25,427
-
-
(2,675)
7,601
(99,907)
44,617
-
(47,444)
2,496,353
3,084
2,398,545
2015
£
2,215,363
1,582,967
-
8,835
27,340
138,273
13,204
23,678
700,968
1,717,344
98,171
1,815,515
2014
£
3,342,475
2,264,316
9,660
10,742
38,344
155,669
11,037
24,039
664,191
1,766,704
70,788
1,837,492
Auditor’s remuneration
- audit services (parent company)
Total cost of sales, selling and distribution and administrative
expenses
37,268
38,042
6,563,411
8,396,007
UNIVISION ENGINEERING LIMITED - 56 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
11. DIRECTORS’ REMUNERATION
Directors’ remuneration for the year is disclosed as follows:
Salaries,
bonuses and
allowances
£
Pension
scheme
contributions
£
23,996
23,855
54,633
43,706
146,190
120
720
1,400
1,400
3,640
2015
£
24,116
24,575
56,033
45,106
149,830
11,518
-
11,518
157,708
3,640
161,348
Salaries,
bonuses and
allowances
£
Pension
scheme
contributions
£
-
49,102
48,630
42,369
140,101
-
1,216
911
1,216
3,343
2014
£
-
50,318
49,541
43,585
143,444
11,671
-
11,671
151,772
3,343
155,115
Executive directors
Stephen Sin Mo KOO
Yip Tak CHAN (appointed on 3 October 2014)
Chun Pan WONG
Danny Kwok Fai YIP
Non-executive director
Nicholas James LYTH
Executive directors
Stephen Sin Mo KOO
Chun Pan WONG
Chun Hung WONG (resigned on 31 December
2013)
Danny Kwok Fai YIP
Non-executive director
Nicholas James LYTH
12. FINANCE COSTS
Interest on bank loans and other borrowings wholly repayable
within one year
Finance charge on obligation under finance lease
2015
£
2014
£
25,252
1,148
26,400
19,623
1,164
20,787
UNIVISION ENGINEERING LIMITED - 57 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
13.
INCOME TAX IN THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(a) Income tax in the consolidated statement of comprehensive income:
Income tax (credit)/expense
Hong Kong profits tax
PRC income tax
Taiwan income tax
2015
£
2014
£
-
-
(13,023)
-
-
13,499
(13,023)
13,499
No Hong Kong profits tax has been provided for in the financial statements as the Company has
unused tax losses to offset against its taxable profit during the year.
Taxes for subsidiaries are calculated using the rates prevailing in their local jurisdictions, whereas
PRC income tax rate is charged at 25% (2014: 25%) and Taiwan income rate is charged at 17%
(2014: 17%).
(b) Reconciliation between income tax expense and accounting profit at the applicable tax
rates:
Profit before income tax
Notional tax on profit before income tax, calculated at the rates
applicable to profit in the tax jurisdictions concerned
Tax effect of non-taxable income
Tax effect of non-deductible expenses
Tax effect of temporary differences not recognised
Utilisation of tax losses unrecognised deferred tax assets
Tax adjustments
Income tax (credit)/expense
14. EARNINGS PER SHARE
2015
£
2014
£
130,189
2,918,229
26,778
(7,272)
14,647
(2,403)
(22,361)
(22,412)
480,655
(421,138)
33,618
(2,341)
(58,541)
(18,754)
(13,023)
13,499
The calculation of basic earnings per share is based on the profit attributable to the equity
shareholders of the Company for the year of £59,937 from continuing and discontinued operations
(2014: £2,820,587) and for the year of £90,594 (2014: £2,900,301), and the weighted average of
383,677,323 (2014: 383,677,323) ordinary shares in issue during the year.
There were no potential dilutive instruments at either financial year end.
UNIVISION ENGINEERING LIMITED - 58 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
15. DIVIDENDS
(i) Dividends payable to equity shareholders of the Company attributable to the year:
2015
£
2014
£
Special dividend declared and payable of 0.2 pence per ordinary
share
791,425
-
Final dividend proposed after the end of the reporting period of
0.034 pence per ordinary share (2014: 0.024 pence per ordinary
share)
130,286
92,571
The final dividend proposed after the end of the reporting period has not been recognised as a
liability at the end of the reporting period.
(ii) Dividends payable to equity shareholders of the Company attributable to the previous financial
year, approved and paid during the year
Final dividend in respect of the previous financial year, approved
and paid during the year, of 0.024 pence per ordinary share
(2014: 0.063 pence per ordinary share)
130,561
242,558
2015
£
2014
£
UNIVISION ENGINEERING LIMITED - 59 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
16. PLANT AND EQUIPMENT
The Group
Furniture and
fixtures
£
Computer
equipment
£
Motor
vehicles
£
Research
assets
£
Total
£
Cost
At 1 April 2013
Additions
Disposals
Foreign translation difference
207,099
9,049
-
(22,693)
168,190
6,953
(2,440)
(17,803)
152,332
-
(6,079)
(15,009)
571,194
-
-
(61,994)
1,098,815
16,002
(8,519)
(117,499)
At 31 March 2014
193,455
154,900
131,244
509,200
988,799
At 1 April 2014
Additions
Disposals
Foreign translation difference
193,455
4,691
(122)
19,394
154,900
6,229
-
16,452
131,244
24,633
(5,288)
15,851
509,200
-
-
48,977
988,799
35,553
(5,410)
100,674
At 31 March 2015
217,418
177,581
166,440
558,177
1,119,616
Accumulated depreciation
At 1 April 2013
Charge for the year
Disposals
Foreign translation difference
173,282
17,487
-
(19,624)
162,944
3,854
(2,440)
(17,114)
109,000
23,528
(3,039)
(12,165)
566,756
4,217
-
(61,773)
1,011,982
49,086
(5,479)
(110,676)
At 31 March 2014
171,145
147,244
117,324
509,200
944,913
At 1 April 2014
Charge for the year
Disposals
Foreign translation difference
171,145
15,610
(122)
17,878
147,244
5,001
-
15,470
117,324
15,561
(4,770)
13,469
509,200
-
-
48,977
944,913
36,172
(4,892)
95,794
At 31 March 2015
204,511
167,715
141,584
558,177
1,071,987
Net book value
At 31 March 2015
At 31 March 2014
12,907
22,310
9,866
7,656
24,856
13,920
-
-
47,629
43,886
At the end of the reporting period, the net book value of motor vehicle held under finance lease of
the Group and the Company was £8,835 (2014: £8,556).
UNIVISION ENGINEERING LIMITED - 60 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
16. PLANT AND EQUIPMENT (CONTINUED)
The Company
Cost
At 1 April 2013
Additions
Disposals
Foreign translation difference
At 31 March 2014
At 1 April 2014
Additions
Disposals
Foreign translation difference
At 31 March 2015
Accumulated depreciation
At 1 April 2013
Charge for the year
Disposals
Foreign translation difference
At 31 March 2014
At 1 April 2014
Charge for the year
Disposals
Foreign translation difference
At 31 March 2015
Net book value
At 31 March 2015
At 31 March 2014
Furniture and
fixtures
£
Computer
equipment
£
Motor
vehicles
£
Total
£
14,210
4,305
-
(1,471)
17,044
17,044
276
-
2,139
19,459
12,783
1,008
-
(1,196)
12,595
12,595
1,307
-
1,678
15,580
37,980
1,410
-
(3,481)
35,909
35,909
6,229
-
5,007
47,145
33,485
2,173
-
(3,110)
32,548
32,548
3,000
-
4,304
39,852
67,706
-
(6,079)
(5,824)
119,896
5,715
(6,079)
(10,776)
55,803
108,756
55,803
20,381
(2,960)
8,466
108,756
26,886
(2,960)
15,612
81,690
148,294
40,107
13,313
(3,039)
(4,065)
86,375
16,494
(3,039)
(8,371)
46,316
91,459
46,316
10,298
(2,442)
6,442
91,459
14,605
(2,442)
12,424
60,614
116,046
3,879
4,449
7,293
3,361
21,076
32,248
9,487
17,297
UNIVISION ENGINEERING LIMITED - 61 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
17. GOODWILL
The Group
Cost
At 31 March 2014 and 2015
Less: accumulated impairment loss
At 31 March 2014 and 2015
Net carrying amount
At 31 March 2014 and 2015
£
961,845
936,015
25,830
Impairment test for cash-generating unit containing goodwill
Goodwill is allocated to the Group’s cash-generating unit (“CGU”) identified according to operating
segment as follows:
Security and surveillance
2015
£
2014
£
25,830
25,830
The recoverable amount of the CGU is determined based on value-in-use calculations. These
calculations use cash flow projections based on financial budgets approved by management covering
a twelve month period. A discount rate of 15% has been used for the value-in-use calculations.
Key assumptions used for value-in-use calculations:
Gross margin
Growth rate
2015
2014
25%
15%
20%
11%
Management determined the budgets based on their experience and knowledge in the construction
contracts operations. The discount rate used is pre-tax and reflects specific risks relating to the
relevant segment.
Based on the impairment test performed, no impairment loss is recognised for the year (2014: Nil).
UNIVISION ENGINEERING LIMITED - 62 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
18.
INTERESTS IN SUBSIDIARIES
Unlisted shares, at cost
Add: foreign translation difference
Less: impairment loss
Amounts due from subsidiaries
Less: impairment loss
Add: foreign translation difference
Total
2015
£
2014
£
639,965
-
(625,005)
1,053,475
161,537
(1,201,190)
14,960
91,424
-
-
13,822
7,213,254
(4,459,285)
(514)
91,424
2,753,455
106,384
2,767,277
Amounts due from subsidiaries are unsecured, interest-free with no fixed term of repayment.
The following list contains the particulars of subsidiaries which principally affected the results,
assets and liabilities of the Group during the year ended 31 March 2015:
Name
Place of
incorporation
and
operations
Issued and
fully paid up
share capital/
registered capital
T-Com Technology Co
Taiwan
Limited
NT$80,000,000
Ordinary share
Percentage
of equity
held by
the Company
Directly Indirectly
52.25%
-
Principal activities
Supply, design, installation
and maintenance of closed
circuit television and
surveillance systems and the
sale of security system
related products
Investment holding
Leader Smart Holdings
BVI
Limited #
Leader Smart
Hong Kong
Engineering Limited #
US$10,000
Ordinary share
HK$10,000
Ordinary share
The PRC
US$1,000,000
Registered capital
Leader Smart
Engineering
(Shanghai) Limited #
# (collectively the
“Leader Smart
Group”)
100%
-
-
-
100%
Investment holding and
engineering contractor
100%
Supply, design, installation
and maintenance of
electrical and mechanical
systems, construction
decorations and provision of
engineering consultancy
services
# On 31 March 2015, the Company approved the decision to demerge the Leader Smart Group from
the Group by distribution as a dividend in specie to its shareholders at the fair value of the assets to
be distributed. Accordingly, amounts due from subsidiaries in the Company Statement of Financial
Position as at 31 March 2014 were restated as amounts due from former subsidiaries under non-
current assets (note 21) in the Consolidated and Company Statement of Financial Position as at 31
March 2015.
UNIVISION ENGINEERING LIMITED - 63 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
19.
INVENTORIES
Raw materials
Work in progress
Finished goods
Less: impairment loss
The Group
The Company
2015
£
2014
£
477,295
-
832,710
1,310,005
(104,541)
300,238
490
878,454
1,179,182
(120,117)
2015
£
477,295
-
364,615
841,910
-
2014
£
300,238
-
444,143
744,381
-
1,205,464
1,059,065
841,910
744,381
The Group recognised a provision for obsolete inventories of £0 (2014: £9,660) on slow-moving
inventories.
20. CONTRACTS-IN-PROGRESS
The Group
The Company
2015
£
2014
£
2015
£
2014
£
Contract costs incurred plus
attributable profits less
foreseeable losses
Progress billings to date
Represented by:
Amounts due from customers for
contracts-in-progress
Less: allowance for doubtful
19,237,828
(18,197,386)
30,934,302
(17,397,940)
17,420,721
(17,936,359)
13,957,023
(13,621,970)
1,040,442
13,536,362
(515,638)
335,053
2,411,247
14,404,193
813,681
964,673
debts
(206,436)
(377,670)
(206,436)
(145,515)
Amounts due from customers for
contracts-in-progress, net (note
21)
Amounts due to customers for
2,204,811
14,026,523
607,245
819,158
contracts-in-progress (note 23)
(1,164,369)
(490,161)
(1,122,883)
(484,105)
1,040,442
13,536,362
(515,638)
335,053
At 31 March 2015, the amount of retention receivables from construction customers recorded within
“trade and other receivables” is £49,122 (2014: £52,689).
UNIVISION ENGINEERING LIMITED - 64 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
21. TRADE AND OTHER RECEIVABLES
Current portion:
Trade receivables
Less: allowance for doubtful
debts
Trade receivables, net
Other receivables
Deposits and prepayments
Amounts due from customers for
contracts-in-progress, net (note
20)
Less: non-current portion –
amounts due from customers for
contracts-in-progress
Non-current portion:
Amounts due from customers for
contracts-in-progress
Amounts due from former
subsidiaries
The Group
The Company
2015
£
2014
£
2015
£
2014
£
1,156,106
1,414,152
769,265
760,300
(191,806)
(469,128)
(65,131)
(57,942)
964,300
494,783
659,109
945,024
404,973
247,460
704,134
397,233
130,706
702,358
244,476
102,824
2,204,811
4,323,003
14,026,523
15,623,980
607,245
1,839,318
819,158
1,868,816
-
(1,324,331)
-
-
4,323,003
14,299,649
1,839,318
1,868,816
-
1,324,331
-
2,973,435
-
2,973,435
2,973,435
1,324,331
2,973,435
-
-
-
All of the trade and other receivables are expected to be recovered within one year, other than those
separately disclosed.
Upon the completion of demerger transaction (see notes 18 and 31), the net carrying value of the
balances due from the Leader Smart Group was restated as £2,973,435. After the end of the
reporting period, the net balance was re-assigned to the Parent of the Leader Smart Group (note 34).
UNIVISION ENGINEERING LIMITED - 65 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
21. TRADE AND OTHER RECEIVABLES (CONTINUED)
(a)
Impairment of trade receivables
Impairment losses in respect of trade receivables are recorded using an allowance account unless the
Group is satisfied that recovery of the amount is remote, in which case the impairment loss is written
off against trade receivables directly. Movements in the allowance for doubtful debts:
The Group
The Company
2015
£
2014
£
2015
£
At 1 April
Impairment loss recognised
Recovery from bad debts
Written back of allowance
Foreign translation difference
469,128
-
(16,508)
-
(260,814)
637,847
99,907
(44,617)
(168,779)
(55,230)
At 31 March
191,806
469,128
57,942
-
-
-
7,189
65,131
2014
£
240,929
-
-
(168,779)
(14,208)
57,942
At 31 March 2015, trade receivables of the Group and the Company amounting to £0 (2014:
£99,907) and £0 (2014: £0) respectively, are individually determined to be impaired and an
impairment loss was provided. These individually impaired receivables were outstanding over one
year at the end of the reporting period.
(b) Trade receivables that are not impaired
The following is an aged analysis of trade receivables at the end of the reporting period that were
past due but not impaired:
0 to 90 days
91 to 365 days
Over 365 days
The Group
The Company
2015
£
856,306
56,218
51,776
2014
£
786,137
126,401
32,486
2015
£
645,262
55,766
3,106
2014
£
615,258
80,155
6,945
964,300
945,024
704,134
702,358
Receivables that were past due but not impaired relate to a number of independent customers that
have a good track record with the Group. Based on past experience, management believes that no
impairment allowance is necessary in respect of these balances as there has not been a significant
change in credit quality and the balances are still considered fully recoverable. The Company does
not hold any collateral over these balances.
UNIVISION ENGINEERING LIMITED - 66 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
22. CASH AND BANK BALANCES
(a) Cash and cash equivalents
Cash at bank and on hand
Restricted cash *
Cash and cash equivalents in the
consolidated and the Company’s
statement of cash flows
The Group
The Company
2015
£
2014
£
2015
£
2014
£
1,099,861
121,846
310,805
69,055
1,044,484
-
160,210
-
1,221,707
379,860
1,044,484
160,210
* At 31 March 2015, the Group maintained £121,846 (2014: £69,055) as restricted cash held at bank
as security against the banking facilities (note 25).
(b) Bank deposits
At 31 March 2015, £251,641 (2014: £223,865) are restricted deposits held at bank with maturities
greater than three months, as a pledge for performance bonds in respect of construction contracts
undertaken by the Group and the Company.
The effective interest rate on bank deposits was 0.37% per annum (2014: 0.41%).
(c) Cash and bank balances are denominated in the following currencies:
AUD
CAD
GBP
HKD
JYP
NTD
RMB
USD
The Group
The Company
2015
£
327
798
115
1,263,290
67
175,935
-
32,816
2014
£
350
813
115
380,702
70
211,460
475
9,740
2015
£
327
798
115
1,263,148
67
-
-
31,670
2014
£
350
813
115
374,209
70
-
-
8,518
1,473,348
603,725
1,296,125
384,075
UNIVISION ENGINEERING LIMITED - 67 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
23. TRADE AND OTHER PAYABLES
Trade payables
Bills payable
Due to related parties (note 29(b))
Accruals and other payables
Deferred income on financial
guarantees issued (note 31)
Amounts due to customers for
contracts-in-progress (note 20)
The Group
The Company
2015
£
2014
£
585,931
197,437
148,540
1,146,339
1,978,634
236,528
37,017
1,500,009
2015
£
79,176
-
6,791
1,048,953
2014
£
67,577
-
-
893,094
-
302,604
-
-
1,164,369
490,161
1,122,883
484,105
3,242,616
4,544,953
2,257,803
1,444,776
24.
INCOME TAX IN THE STATEMENT OF FINANCIAL POSITION
(a) Current tax liability in the statement of comprehensive income represents:
Hong Kong profits tax
PRC income tax
Taiwan income tax
The Group
The Company
2015
£
2014
£
2015
£
2014
£
-
-
34,442
-
1,144,800
82,173
34,442
1,226,973
-
-
-
-
-
-
-
-
(b) Unrecognised deferred tax assets
At 31 March 2015, the Company had unused tax losses of £4,746,391 (2014: £4,512,158) that were
available for offset against future taxable profits of the Company. No deferred tax assets have been
recognised due to the unpredictability of the future profit streams. Such unused tax losses are
available to be carried forward at no expiration.
No provision for deferred tax liabilities has been made in the financial statements as the tax effect of
temporary differences is immaterial to the Group and the Company.
UNIVISION ENGINEERING LIMITED - 68 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
25. LOAN AND BORROWINGS
The Group
The Company
2015
£
2014
£
2015
£
2014
£
1,122,052
440,582
-
-
Within one year or on demand:
Secured bank loans (note a)
Note:
The secured bank loans carried interest at rates ranging from 3.49% to 3.68% per annum (2014:
3.39% to 3.91% per annum) and were secured by:-
(i) Restricted cash (note 22) and;
(ii) Personal guarantee by the Chairman of the Company, Mr. Stephen Sin Mo KOO (note 29(c)).
26. OBLIGATIONS UNDER FINANCE LEASE
At 31 March 2015 and 2014, the Group and the Company had obligations under finance lease as
follows:
Minimum lease payment
Present value of the minimum
lease payment
2015
£
2014
£
2015
£
2014
£
Within one year
Between two to five years
Total minimum finance lease
payments
Less: future finance charges
Present value of lease obligation
8,944
745
9,689
1,354
8,335
7,956
8,620
7,694
641
6,844
7,415
16,576
8,335
14,259
2,317
14,259
UNIVISION ENGINEERING LIMITED - 69 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
27. SHARE CAPITAL
Authorised :
800,000,000 ordinary shares of HK$0.0625 each
2015
£
2014
£
3,669,470
3,669,470
Issued and fully paid:
383,677,323 ordinary shares (2014: 383,677,323 ordinary shares)
of HK$0.0625 each
1,697,617
1,697,617
The Company has one class of ordinary shares.
28. EMPLOYEE RETIREMENT BENEFITS
(a) The Company operates a Mandatory Provident Fund scheme (the “MPF scheme”) under the
Hong Kong Mandatory Provident Fund Schemes Ordinance for employees employed under the
jurisdiction of the Hong Kong Employment Ordinance. The MPF scheme is a defined
contribution retirement scheme administered by independent trustees. Under the MPF scheme,
the employer and its employees are each required to make contributions to the scheme at 5% of
the employees’ relevant income, subject to a cap of monthly relevant income of HK$30,000
(HK$25,000 prior to June 2014). Contributions to the MPF scheme vest immediately.
(b) Employees of the subsidiary in Taiwan chose to participate in a defined contribution scheme
governed by the Labour Pension Act of Taiwan. This subsidiary contributes at 6% of the total
salaries of the participating employees who have chosen to participate in the defined
contribution scheme, the contribution deposited into individual pension accounts at the Bureau
of Labour Insurance of Taiwan.
Save as set out above, the Group has no other material obligations to make payments in respect of
retirement benefits of the employees.
UNIVISION ENGINEERING LIMITED - 70 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
29. RELATED PARTY TRANSACTIONS
Compensation of key management personnel
The remuneration of the key management of the Group during the year was as follows:-
Salaries, bonus and allowances
2015
£
2014
£
226,725
243,431
The remuneration of key management personnel comprises the remuneration of Executive Directors
and key executives.
Executive Directors include the Executive Chairman, Chief Executive Officer, Technical Director
and Finance Director of the Company. The remuneration of the Executive Directors is determined
by the Remuneration Committee having regard to the performance of individuals, the overall
performance of the Group and market trends. Further information about the Remuneration
Committee and the Directors’ remuneration is provided in the Remuneration Report and the Report
on Corporate Governance to the Annual Report and note 11 to the financial statements.
Key executives include the Director of Operations and Director of Sales and Marketing of the
Company. The remuneration of the key executives is determined by the Executive Directors
annually having regard to the performance of individuals and market trends.
Biographical information on key management personnel is disclosed in the Directors’ and Senior
Management’s Biographies section of the Annual Report.
Transactions with related parties
(a) At 31 March 2015, there is a payable balance of £202 (2014: £37,017) due to Mr. Stephen Sin
Mo KOO, the Director of the Company, which is unsecured, interest-free and repayable on
demand (note 23).
(b) At 31 March 2015, there is a payable balance of £140,436 (2014: Nil) due to non-controlling
shareholders of a subsidiary of the Company, which is unsecured, interest-free and repayable
on demand.
(c) At 31 March 2015, the bank facilities amounting to £1,037,063 (2014: £946,068) are
personally guaranteed by Mr. Stephen Sin Mo KOO, which remained unused. No charge has
been requested for this guarantee (note 25).
Apart from the transactions disclosed above and elsewhere in the financial statements, the Group and
the Company had no other material transactions with related parties during the year.
UNIVISION ENGINEERING LIMITED - 71 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
30. COMMITMENTS
(a)
Capital commitments
At 31 March 2015, the Group and the Company has no material capital commitments outstanding.
(b) Operating lease commitments
At the end of the reporting period, the total future minimum lease payments under non-cancellable
operating leases for the office and warehouse premises are payable as follows:
The Group
The Company
2015
£
2014
£
2015
£
2014
£
Within one year
Between two to five years
93,041
46,633
114,902
28,055
50,872
46,633
70,764
21,187
139,674
142,957
97,505
91,951
31. DEMERGER TRANSACTION
During the year ended 31 March 2015, the Company approved a corporate restructuring exercise by
demerging its Electrical and Mechanical business that was operated by its subsidiaries namely
Leader Smart Engineering Limited and Leader Smart Engineering (Shanghai) Limited (collectively
the “Leader Smart Group”). All of the issued shares in the Leader Smart Group were transferred to
Leader Smart Holdings Limited, a BVI company, whose shares were distributed as non-cash
dividends, ranking pari passu in all respects with the existing shareholders of the Company. This
exercise is treated as the distribution of non-cash assets to owners and the dividend in specie has
been debited to the retained earnings accordingly.
The net carrying values of the assets to be distributed at 31 March 2015:
ASSETS
Trade and other receivables
Cash and cash equivalents
Total assets
LIABILITIES
Trade and other payables
Current tax liability
Financial guarantee liabilities
Total liabilities
Net asset value
Special dividend declared and payable per ordinary share
UNIVISION ENGINEERING LIMITED - 72 - ANNUAL REPORT 2015
£
13,931,948
6,812
13,938,760
11,519,954
1,287,150
340,231
13,147,335
791,425
0.2p
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
31. DEMERGER TRANSACTION (CONTINUED)
Electrical and Mechanical business was discontinued on 31 March 2015 and its operating results are
presented as follows:
Revenue from discontinued operations
Other income
Other gains and losses
Administrative expenses
2015
£
2014
£
51,129
71,159
2,186
(48,190)
(35,782)
-
(96,017)
(44,597)
Loss for the year from discontinued operations
(30,657)
(79,714)
Earnings per share – Basic and Diluted
(0.01)p
(0.02)p
Cash flows from discontinued operations
Net cash outflows from operating activities
Net cash outflows from investing activities
Net cash outflows from financing activities
Effect of foreign exchange changes, net
2015
£
2014
£
(2,470)
-
-
2,440
(30)
402
-
-
(360)
42
Upon the completion of demerger transaction, a net effect of £4,730,991 was charged directly in
equity.
32. CONTINGENT LIABILITIES
In the opinion of the Directors of the Company, there were no material contingent liabilities
outstanding at 31 March 2015.
33. COMPARATIVE FIGURES
Certain comparative figures in these financial statements have been re-classified to conform to the
current year's presentation
UNIVISION ENGINEERING LIMITED - 73 - ANNUAL REPORT 2015
UNIVISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2015
34. EVENTS AFTER THE END OF THE REPORTING PERIOD
(i)
On 1 April 2015, the Company entered into the assignment of deed and agreed to transfer the
balance with its former subsidiaries to their parent company namely Leader Smart Holdings
Limited.
(ii) On 1 September 2015, the directors proposed a final dividend. Further details are disclosed in
note 15(i).
35. APPROVAL OF FINANCIAL STATEMENTS
The financial statements were approved and authorised for issue by the Board of Directors on 10
September 2015.
UNIVISION ENGINEERING LIMITED - 74 - ANNUAL REPORT 2015
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT the 2015 Annual General Meeting (AGM) of UniVision
Engineering Limited will be held at UniVision Engineering Limited, Unit 01A, 2/F., Sunbeam Centre,
27 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong, on 8 October 2015 at 5:00 p.m. The
following businesses will be transacted then:
As ordinary business:
1. To receive and adopt the Company’s audited financial statements for the financial year ended 31
March 2015 together with the Directors’ report and the Independent Auditor’s report;
2. To declare a final dividend for the financial year ended 31 March 2015.
3. To re-elect Mr. Nicholas James LYTH who retired by rotation, as a Non-Executive Director of the
Company;
4. To re-elect Mr. Stephen Sin Mo KOO who retired by rotation, as a Director of the Company;
5. To re-elect Mr. Danny Kwok Fai YIP who retired by rotation, as a Director of the Company;
6. To reappoint auditor HKCMCPA Company Limited, Certified Public Accountants as auditors of
the Company, to hold office from the conclusion of the meeting to the conclusion of the next
meeting, during which accounts will be laid before the Company and to authorize the Directors to
adjust their remuneration packages;
7. That the directors of the Company be and are hereby generally and unconditionally authorized to
exercise all powers of the Company to allot ‘Ordinary Shares’ the capital of the Company. Such
authority (unless and to the extent previously revoked, varied or renewed by the Company during
the general meeting) to expire 15 months after the date of the passing of such resolution or on the
conclusion of the Company’s next AGM to be held, following the date of passing such resolution,
whichever occurs first, save that the Company may before such expiry make any offer or
agreement which would or might require Ordinary Shares to be allotted after such expiry, and that
the Directors may allot Ordinary Shares in pursuance of such an offer or an agreement as if such
authority had not expired. This authority substitutes all subsisting authorities to the extent unused.
8. That the directors of the Company be and are hereby generally and unconditionally authorized to
exercise all powers of the Company to repurchase the ’Ordinary Shares’ in the capital of the
Company, including any form of depositary receipt. Such authority (unless and to the extent
previously revoked, varied or renewed by the Company during the general meeting) to expire 15
months after the date of the passing of such resolution or on the conclusion of the Company’s next
AGM to be held, following the date of passing such resolution, whichever occurs first, save that
the Company may before such expiry make any offer or agreement which would or might require
Ordinary Shares to be repurchased after such expiry, and that the Directors may buy back
Ordinary Shares in pursuance of such an offer or an agreement as if such authority had not
expired.
UNIVISION ENGINEERING LIMITED - 75 - ANNUAL REPORT 2015
By Order of the Board
Mr. Stephen Sin Mo KOO
Executive Chairman
10 September 2015
Registered office:
Unit 01A, 2/F., Sunbeam Centre,
27 Shing Yip Street,
Kwun Tong, Kowloon,
Hong Kong
NOTES:
1. Only holders of Ordinary Shares, or their duly appointed representatives, are entitled to attend and
vote at the Annual General Meeting. A member so entitled may appoint one or more proxies
(whether they are members or not) to attend and, on a poll, to vote in place of the member.
2. A form of proxy is enclosed with this notice. To be valid, the form of proxy and any power of
attorney or other authority (if any) under which it is signed, or a notarized and certified copy of
that power of authority, must be lodged with the Company’s registrars, c/o Computershare
Investor Services Plc., The Pavilions, Bridgwater Road, Bristol BS99 6ZY, not less than 48 hours
before the Annual General Meeting takes place.
3. Completion and return of a proxy does not preclude a member from attending and voting at the
Annual General Meeting.
4. The Company pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001
specifies that only those shareholders registered in the Register of Members of the Company as of
18 September 2015 are entitled to attend or vote at the Annual General Meeting in respect to the
number of shares registered in their name at that time. Changes to entries on the Register after
that time will be disregarded when determining the rights of any person to attend or vote in the
Annual General Meeting.
UNIVISION ENGINEERING LIMITED - 76 - ANNUAL REPORT 2015